S&P 500 Tanks to Nearly Two-Month Low

Support Becoming Resistance on the S&P 500

The fourth-quarter market is shifting. The S&P 500 rebounded from its late September lows to highs on October 12 …  but is now plunging.

What’s driving the change? Companies reporting September results and the strain of staggering new COVID-19 cases and hospitalizations across the U.S.

Collapsing stimulus negotiations and the upcoming election aren’t exactly helping either.

Last week, the S&P 500 bounced off its 50-day moving average around 340. It’s now fallen below its 50-day moving average within the last few days.

That’s all building more uncertainty in the markets.

On Tuesday, the S&P 500 attempted to cross back over the 50-day moving average and failed. So now that average has become resistance at 340.

As of this writing, the S&P is down another 3.21% after gapping down from Tuesday’s low. It will need a strong push to break resistance.

There’s still another trading day left before large-cap companies release earnings reports. If reports from Amazon (NASDAQ: AMZN), Apple (NASDAQ: AAPL), and Facebook (NASDAQ: FB) are strong, that could push the S&P 500 up again.

If not, the SPY (S&P 500) may continue to drop. This could swing the S&P 500 into correction territory as the markets are already oversold.

S&P chart october 28
SPDR S&P 500 ETF Trust chart, October 28, 2020 — courtesy of StocksToTrade.com

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