MoneyBeat by Paul Vigna
Since Feb. 11, the market did break through several resistance points rather easily, mainly on the back of 1% gains in four of the past six sessions. It was a good run, but it isn’t on its own the signal of a bottom for the technical analysts. “Current price structure in U.S. and global equity indexes continue to warn of a deeper intermediate term decline,” said John Kosar, director of research at Asbury Research. Two things he’d like to see to indicate a wider turnaround: narrowing corporate bond spreads, and expanding ETF asset flows.
Resistance for the S&P is at the 50-day moving average, currently sitting at 1949 (for the record, the 200-day moving average lies at 2029). That has so far proven a stubborn mark. On Monday, the index rose to that level in the opening minutes of trade, and spent the rest of the afternoon trapped in a tight range underneath that. On Tuesday, situated just under that mark, equities dropped from then opening bell, and have been mired deep in the red all morning.
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