LIVE MARKETS-S&P 500 index: Will the 200-DMA cap the claw back?

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S&P 500 INDEX: WILL THE 200-DMA CAP THE CLAW BACK?

Last Thursday, the S&P 500 index .SPX confirmed it was in a correction by ending down 10.13% from its February 19 record close.

With this decline, the SPX flirted with the 23.6% Fibonacci retracement of its October 2022-February 2025 advance, at 5,520.65, and the 61.8% Fibonacci retracement of the August 2024-February 2025 rise, at 5,512.02.

The benchmark index hit an intraday low of 5,504.65 that day before ending at 5,521.52.

Additionally, last Thursday, the SPX's 14-day Relative Strength Index (RSI) fell to its most oversold level since September 27, 2022, or just 11 trading days ahead of the 2022 bear-market closing low.

Now, in less than a week, the SPX hit a high of 5,715.33 on Wednesday, before ending at 5,675.29, up 2.8% from last Thursday's close. This put it down 7.63% from its record finish.

In terms of resistance, the 200-day moving average is seen as the next big hurdle. It should be just below 5,750 on Thursday:

Thus, bulls will be looking for the S&P 500 to reclaim this closely followed long-term moving average on a closing basis to suggest the recovery is gaining steam.

That said, in pre-market trade on Thursday, e-mini S&P 500 futures EScv1, off around 0.4%, are suggesting opening weakness for the index.

An SPX break of Tuesday's low at 5,597.76 can put the 5,504.65 March 13 trough at risk again.

(Terence Gabriel)

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