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S&P 500 (SPY) Tries To Settle Below 3600

By:
Vladimir Zernov
Published: Oct 10, 2022, 17:11 GMT+00:00

Chip stocks remain under strong pressure. Consumer defensive stocks get some support as traders try to find safe-haven assets in the falling market.

S&P 500

In this article:

Key Insights

  • Chip stocks are losing ground as traders worry that new export controls will hurt profitability of the leading semiconductor companies. 
  • Casino stocks retreat amid worries about coronavirus-related measures in Macau. 
  • A move below the support at 3585 will push S&P 500 towards the next support level at 3560.

S&P 500 Retreats At The Start Of The Week

S&P 500 remains under strong pressure at the start of the week as traders sell stocks amid recession worries.

The pullback is led by tech stocks. The new export rules aimed at containing China’s access to top technology may lead to significant losses for the companies in this market segment. As a result, stocks like NVIDIA and Intel are testing yearly lows.

Casino stocks like Wynn Resorts and Las Vegas Sands are down by about 10% amid worries about coronavirus-related measures in Macau.

Meanwhile, recession worries continue to put pressure on cruise stocks. Norwegian Cruise Line, Carnival Corporation, and Royal Caribbean Cruises are down by 5-8% in today’s trading.

It should be noted that there is some demand for consumer defensive stocks like Kroger, Kraft Heinz, and Altria.

From a big picture point of view, the sell-off is broad, and the market is moving towards yearly lows. Traders fear that Fed’s aggressive rate hikes will put too much pressure on the economy and cause a severe recession instead of a “soft landing.”

S&P 500 Is Moving Towards Yearly Lows

S&P 500

S&P 500 is currently trying to settle below the 3600 level. In case this attempt is successful, it will head towards the support at 3585. RSI remains in the moderate territory, and there is plenty of room to gain additional downside momentum in case the right catalysts emerge.

If S&P 500 declines below 3585, it will head towards the next support level at 3560. A move below this level will open the way to the test of the support at 3525.

On the upside, the previous support at 3615 will serve as the first resistance level for S&P 500. In case S&P 500 climbs back above this level, it will head towards the resistance at 3640. A successful test of the resistance at 3640 will push S&P 500 towards the resistance level at 3675.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

Vladimir is an independent trader and analyst with over 10 years of experience in the financial markets. He is a specialist in stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading.

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