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.
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