S&P 500 Testing the 100-Day SMA Critical Support

Summary:

S&P 500 open lower on Friday on worries that the rising number of new infections will halt the economic recovery while the delay in a new relief package

S&P 500 open lower on Friday on worries that the rising number of new infections will halt the economic recovery while the delay in a new relief package weighs on investors sentiment. A volatile week in markets is coming to an end with S&P 500 giving up over 3%, marking the first month with losses since March. Nasdaq has lost 10% since the September 2 highs.

Poor economic data from the USA continued today. On Friday’s economic calendar, the August durable goods orders increase of 0.4% weaker than the expectations for a 1.5% advance. The July figure was revised higher to 11.7%. Durable Goods Orders excluding Transportation came at 0.4% also below the forecasts of 1.2%. Durable Goods Orders excluding Defense registered in at 0.7% topping the estimates of 0.1% in August.

Now investor focus shifts to the House of Representatives as the Democratic lawmakers working toward passing a $2.4 trillion relief package the next week, that is below the previous $3.4 trillion packages approved in May.
Tesla attempts a rebound today after heavy losses during the week as of writing is 3.45% higher at 401, while Apple is 0.80% higher at 109.

S&P 500 Analysis

S&P 500 tests for the second consecutive session the strong 100-day moving average support at 3,215. The downward trend that started after the index hit the all-time highs in early September accelerated below the 50-day moving average.

In case the S&P 500 close today below 3,215 we might see another leg lower towards 3,108 the 200-day moving average.

On the upside, initial resistance for the S&P 500 index would be met at 3,270 the daily high. Next hurdle stands at 3,333 the top from September 23. Bulls will return on driver’s seat if the index breaches the 50-day moving average at 3,356.