Weekend risk ahead
It’s Friday in stocks and that means weekend news risk. With it comes increased volatility. Obviously the risk is at “red hot levels”.
What technical levels are key the broader indices heading into the weekend?
For the Nasdaq index, the 200 day MA is at 8416.64. The low price today reached 8438.91. The price currently trades at 8529.18. Admittedly we are still over 100 points above the 200 day moving average. However, a move below – and close below – would be the 1st close since June 2019. The price on February 28 (last Friday) did trade below that 200 day moving average on the way to a low of 8264.15. However, the 61.8% retracement at 8264.847 seem to provide some support.
A retest of the 200 day moving average and 61.8% retracement would be key for the market. Any move below each would weaken the technical picture and should lead to further downside momentum. If buyers come in, there may be and other relief rally.
For the S&P index, it is already below its 200 day moving average. The price moved above the level earlier in the week and traded above and below it. However the gap lower today is moving the price for the away from that moving average level currently at 3051.71. It would take a move back above the 200 day moving average to ease some of the bearish bias.
On the downside, the low price from October 3 came in at 2855.94. The low price from last Friday stalled at 2855.84. A move below that double bottom would be more bearish from a technical perspective and traders will be looking for increase momentum to the downside.