At the crossroads.
There is one area generating a lot of attention right now and that is the Daily 200 moving average on the S&P500. In the last two major recessions of 2000 and 2008 the 200 daily moving average acted as a 'barrier' to any attempt at a bullish recovery. It is the place that bull rallies were halted. It remains in even keener focus in 2020 since it also coincides with the 3000 big round number. It will be a key area to look at to confirm or question the so called 'V' shaped recovery hopes.
The place where bull rallies fade
This is a key area and historically the place where bull rallies go to die in recessions. see the hart below for the 2008 and 2001 recessions.
So, going forward we can expect a battle over this level. A clean break and rise above will be great news for the bulls, but expect some attempt by the bears to use this level as a cap. For anyone still short the S&P500 and in pain, this might be the region where you decide to bail on shorts. A break of the 200DMA and close above the level on the daily chart could be a technically sensible place to exit shorts. Conversely, if you are looking to short the S&P500, the 200DMA with tight stops above could be a low risk, high reward place to initiate shorts. Either way, expect this area to be in focus.
