Current trend

The US stock market continues to lose ground. S&P 500 index has been falling for several days in a row. An important support level is 2602.2, which is the previous low. If it is broken down, then a decrease to 2578.1 is possible.

The market is under pressure from a reduction in the price of securities of companies in the technology sector: Apple shares lost 24%, falling from USD 233.47 to 176.80. Amazon shares lose in price as well: despite the Christmas glut of sales, the online retailer’s market capitalization fell by 25%. Facebook shares, which are trading at USD 132, fell by 40% over the past few months. If the situation continues to deteriorate, many hedge funds will continue to reduce their investment portfolios in stocks of technology companies, which will increase the pressure on the market.

The second negative factor for the US stock market is the fall in the capitalization of General Electric. Many analysts are concerned about the company's debt. If the company's revenue will decline, the risks of payments will increase significantly, and debt securities may fall to the "junk" rating. According to economists, the company has debts amounting to about 115 billion dollars. Part of the money was allocated by such large US banks as Morgan Stanley, JP Morgan, Citigroup, and in the case of bankruptcy or non-payment, the risks for these banks can be enormous.

Support and resistance

Stochastic is at 78 points and does not provide a signal for the opening of positions.

Resistance levels: 2682.8, 2704.9.

Support levels: 2629.6, 2578.1.

Trading tips

Short positions may be opened after the breakdown of the support level of 2629.6 with take profit at 2578.1 and stop loss at 2680.0.

S&P500 index of the American stock exchange

BuySellSpread
2604.22598.656

Scenario

TimeframeDay's Range
RecommendationsSELL STOP
Entry Point2629.0
Take Profit2578.1
Stop Loss2680.0
Support levels2578.1, 2629.6, 2682.8, 2704.9
SPX: general review

The material published on this page is produced by the Claws&Horns Company and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC; furthermore it has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

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