LIVE MARKETS-S&P 500 index: Traders bow to the magic of the 200-day MA

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S&P 500 INDEX: TRADERS BOW TO THE MAGIC OF THE 200-DAY MA

The S&P 500 index .SPX gyrated wildly on Tuesday before ending down more than 1%. However, of note, early in the session, the benchmark index did mount a rebound in the wake of a near touch of its rising 200-day moving average (DMA):

Since reclaiming this closely followed long-term moving average on November 2, 2023, the SPX has not registered a daily close back below.

After sliding as much as 2% within the first hour of Tuesday's session, the SPX bottomed at 5,732.59. At that point, it came within seven points, or around 0.1%, of the 200-DMA, which was just over 5,725.00.

A recovery ensued, erasing all losses on the day. However, a last hour sell off once again drove the index down. It finished at 5,778.15.

Now on Wednesday, e-mini futures EScv1 are around flat, and traders are looking to see whether the recovery attempt off the 200-DMA will have legs, or whether it will just prove to be a bearish trick.

The SPX has now fallen as much as 6.75% from its record intraday high, and it ended Tuesday down about 6% from its record closing high.

On a thrust above Tuesday's 5,865.08 intraday high, the next hurdles will be at 23.6% Fibonacci retracement of the August 2024-February 2025 advance at 5,904.78, the February 3 low at 5,923.73, the 100-DMA which should be around 5,955 on Wednesday, and the 50-DMA which should be around 5,985.

In the event the 200-DMA gives way, the next support in terms of chart congestion is in a zone ranging from 5,696 down to 5,651.

The 50% retracement of the August 2024-February 2025 advance is at 5,633.35.

(Terence Gabriel)

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