In this topic we gonna take a look on S&P 500 Index. S&P 500 is one of the major USA index which represents the top USA 500 companies stock market performance. This is one of the major index that all USA traders should follow during their trading day because it would provide them a very helpful information about the whole stock market structure of US economy. A part of it the good thing about this index is that you don’t have to look those 500 companies one by one on your chart screen, you can do that by just following one single index and that is S&P 500 index. Lets come to point and do some chart study of S&P 500 Index.
Overall Market Structure:
As we know that due to Covid-19 US Market has struggled a lot in past a few of months. Especially the months of Feb and March were the worse for the U.S even for the whole universe it was a nightmare. And still we believe that it will take a long time for the recovery. But anyhow S&P 500 Index had shown a good recovery in between middle of the March 2020. According to the current market structure trend is gettng up once again but we are still in a strong seller area. For more information just check the image as shown below. The chart is showing a very clear picture that we are still in the Territory of that big massive seller.
Please pay attention on that blue area. This is really important to understand that the sell is not completed yet or there may chances that once again bear can come into play. Market is climbing up for now and it can retest the level of 3300 to 3400 on chart. A part of it we are also getting a good support from 200 day moving average which is a good indicator for the market buyers. And if we see that a strong bull coming from here in future then we can see a very long term trend in weekly chart and S&P 500 can surge in near future. The level of 3300 to 3400 would be very crucial to check, especially when the market price is near of it that would be interesting.
Financial market is an market of unexpectations, Big market players always think opposite of 99% traders or we can say they do trade against the retailors. If see that S&P 500 gets a good support above $3400 level then more bullishness may come in the index. On the other hand if we don’t have a good support upside then once again index price can come down toward the 200 day moving average. Index Price dropped from almost 3400 to 2200 which is a large percentage of downfall in index. 30% downfall is not a normal thing.
Is the market in uptrend now?
According to the chart we are in recovery phase for now. Whenever there is a seller upside or whenever we are in a seller territory its not easy to say that we are in uptrend. Keep in mind that before the big downfall our last price was almost 3350 to 3400 area. We need a price above there at first and a good support later from up there can move the price more higher.
Checkout this chart, and see market is going up and a head and shoulder pattern may form up near of the resistance area around 3300 to 3350 range.
According to our analysis those two red lines upside are very important to check in near future, because market is going up and there is a high chance that market would touch those important resistance areas. That will be almost the end zone of our Seller, if we see that once again he is dominating or one again he is pushing the market back then there will be a probability that it will go more down toward the area of 2700 which is our strong support area 200 day moving average support line.
In this topic we are giving a clear picture of S&P 500 Index Support and Resistance areas. Market has always two types of impact bull and bear and its important to understand that we have to be ready for the both of those situations. That’s why we always try to suggest about important support and resistance zones on chart.
The Weekly chart of S&P 500 Index is showing some sign’s of improvement for now as you can see in last 2 months we have a large numbers of buyers and have a less numbers of sellers. Those Green and Red candlesticks are giving a very clear indication that buyers are dominating for now but nobody knows what will happen when price will be near of important resistance area. Which is an very important area for that seller who dropped the market from up there means the player is still there and we should keep that in mind for our future decisions.
So this was the important technical analysis of S&P 500 Index in which we discussed about important support and resistance of S&P 500 index as well as we discuss about the overall strucutre of market buyers and sellers. In this topic we also talked about those big market players which is really an unique thing to know in any financial market. Because most of time we just talk about the market support and resistance but don’t know that how those support and resistance areas are related to the big market players.
This was a weekly chart analysis so you have to keep patience and have to wait for the right time here we have talked about the important resistance and support zones and would like to post another article if we have a breakout above price 300. So we have discussed about two types of market conditions those may take place in S&P 500 index.We hope you loved the content and got some understanding about the market technical analysis. Furthermore if you have any doubt or question you can post it in the comment section below.