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S&P 500 technical analysis: 3,330 key rebound level

By Nathan Batchelor

09:17, 2 March 2020

S&P 500 technical analysis

The S&P 500 incurred one it’s largest weekly decline in its trading history, as the index turned heavily negative for the year.

S&P 500 analysis shows that the index has meaningful technical support around the 2,660 and 2,500 levels this week.

Current technical analysis of the S&P 500 indicates that the index could rebound towards the 3,300 to 3,330 level if a technical correction takes place. 

S&P 500 medium-term price trend

The long-term rally in the S&P 500 came to an end in spectacular fashion last week, with the index tumbling by well-over ten percent.

At present, the decline shows few signs of stopping, although central bank assistance or the release of a new vaccine for the coronavirus could cause a sudden rebound.

S&P 500 technical analysis

S&P 500 technical analysis shows that the index is likely to move back towards the 3,300 to 3,330 technical area if a recovery does occur.

The daily time frame also shows that a large price gap was created on the charts during last weeks tumble in the index.

Furthermore, bullish MACD divergence is present until the 3,300 level. Key support for the index this week is found at the 2,725, 2,660, and 2,500 levels.

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S&P 500 short-term price trend

S&P 500 technical analysis shows that the index is bearish over the short-term while price trades below the 3,300 level.

Last week the S&P 500 made its first meaningful weekly price close below its 200-period moving average on the four-hour time frame since August 2019.

S&P 500 technical analysis

Traders should pay attention to this key short-term moving average as it usually marks a major shift in short-term trading sentiment.

The four-hour time frame is also showing that a bullish MACD price divergence is present until the 3,300 technical area.

It is also noteworthy that the presence of bearish MACD price divergence was eroded during last weeks slump below the 3,000 level.

S&P 500 technical summary

S&P 500 analysis indicates that a rebound towards the 3,300 technical area could occur if the index can find support before the 2,500 level. Dip-buyers may be rewarded for their bravery this week.

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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