The 50 hour MA and an gap is being tested
Yesterday the S&P index moved to a new all time high but in the process, found sellers against a topside trend line (see post from yesterday here). The price wandered lower and close near the session lows for the day.
Today, the price opened lower (see hourly chart above) and moved lower. In the process, the price fell below the 50 hour MA (white MA line) but did stall the fall between a gap from December 15 and December 16. That gap comes in between 3298.66 and 3302.97. The low for the day reached 3301.87. The move back higher retested a broken trend line and found sellers. That helps to keep the sellers happy.
We are currently just now breaking back below the 50 hour moving average at 3307 area (as I type). Getting below the 3298.66 level would open the door for a test of the 38.2% retracement at 3290.73. Below that the rising 100 hour moving average at 3276.21 would be on traders radar. Note that the last time the price tested the 100 hour moving average back on December 6, the price bounced off that moving average level. Be aware. It will be a key bias/risk defining level.
The catalyst for the move lower his fears about the coronavirus mainly, although technically the market may be a bit overbought. Intel earnings are after the close and next week the likes of Microsoft, Amazon, Facebook (and more) will be reporting. The S&P index had moved up 3.31% from the end of year level in January at the highs. That comes after a surge into the end of the year. As a result, some corrective activity is not a huge surprise.
At some point, however, the fear will likely fade. The timing of which is hard to define. Technically however a move back above the broken trend line on the hourly chart, would weaken the bears that trend line currently comes in around the 3316 area (and moving higher).
