The coronavirus has forced major lifestyle changes on all of us, the partial or complete shut down of businesses across the globe, and is having a huge impact on world economies and the stock market.
In the S&P 500 today we tested the 2300 price level, a key support area that was reached back in the 2018 during the trade war with China.
Back in 2018 the drop/reversal to the 2300 lows, triggered a bullish force producing the stunning gains we have experienced in 2019 and early part of 2020.
From a technical stand point (and on how agencies are responding to this virus outbreak), today we might have experienced the most important day of the year.
This key support level of 2300 needs to hold. A move below it signifies a major break to the whole technical structure of the S&P 500 index, which could have a cascade effect across all other indices. On the other hand, if this support level continues to hold we might be ready for some sort of bounce.
The day ended on a positive note (from a technical stand point), which suggests that the likely scenario of a short-term bounce is possible. If we get the bounce (tomorrow or Friday), it could be a bear pullback or a bull rally, the former being the more likely scenario.
Tomorrow we will know if we are going to experience a short-term bounce (two-nine days days) or if we haven't found the temporary bottom yet and we are just in free fall.
Let's take a look at the major indices, gold and our Trades of the Day AHPI, APRN, GILD, NVAX, ZM... to see what happened.
Watch this video to get the technical insights.
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