S&P500 in Critical Support

14 June 2022

Technical Analysis

S&P500 in Critical Support

14 June 2022

The selling pressure, which accelerated with the inflation data on Friday and continued towards the closing of the session, is showing itself in all global markets today and the tendency to avoid risk has reached panic levels. In the commodity group, selling pressure is also at the forefront of oil, which has very tight supply/demand dynamics, and Gold, which performs strongly when concerns increase in the markets

The S&P500 index will initially try to stabilize at the critical 3.810 support at the opening.

The messages from the FED on Wednesday are the most important dynamic that will determine the direction of the markets, before the meeting, market players may force the central bank's hand a little more and the downward movements may continue.

The fundamentally 3,700 and technically 3,500 levels that we stated for the index in the previous weeks, together with the breaking of the 3,800 support, are the critical supports that we will watch below. The panic atmosphere triggered by the hawk messages from the ECB and the high incoming inflation data also increases the expectations that an additional hawk tightening message from the FED may come.

Therefore, we may not see a significant recovery in the markets until Wednesday, then short-covering reactions may come to the fore again in the last two days of the week. We can see reaction movements in the last part of the week, especially with the increasing short positions (CBOE put/call ratio approaching the March 2020 panic levels), the perception going pessimistic and the oversold signals starting to come. However, at this point, investors need to be very careful and cautious in a news-oriented market environment where very high volatility is at the forefront.




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