Stock-market traders brace for ‘dogfight’ as S&P 500 lingers below its 200-day moving average – MarketWatch

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A move above or listed below a 200-day moving average– a proxy for changes in a possession’s long-lasting pattern– is always carefully watched by traders&, but the S&P 500’s long courtship with that essential level, as it recovers from its bear-market plunge, is ending up being something of a fixation on Wall Street.

Even if stocks do make it back above the 200-day, history shows that a prolonged run to the benefit is far from guaranteed.


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“‘ A breakout is not most likely to come easily and we anticipate a dogfight here around the 200-day.’.”– Kevin Dempter, expert at Renaissance Macro Research The focus on the 200-day may be improved by the fact that the average stood Friday at 2,999.67, just a whisker below a huge round number.”

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At the same time, it’s held above its 50-day moving average, a metric used by traders to gauge an asset’s short-term pattern. Simply put, stocks are “trapped between amount of time” composed Jason Goepfert, head of SentimenTrader and creator of independent investment research company Sundial Capital Research, in a Friday note (see chart listed below). Through Friday’s close, the index had remained between the 50- and 200-day averages for 21 straight sessions.

The fact that the S&P 500 iscoming off a 35% rally which this 200-DMA lines up with a good even 3,000 number seemingly makes this location specifically essential,” said Kevin Dempter, expert at Renaissance Macro Research, in a Friday note.” A breakout is not likely to come quickly and
we anticipate a dogfight here around the 200-day. “The S&P 500. SPX, +0.23% closed at a record high on Feb. 19, then began a breakneck plunge as concerns over the coronavirus break out started to grow. The selloff continued through March 23, with the large-cap benchmark ending around 34% below its all-time high. Given that then, it’s bounced back dramatically, to trade around 9% below its high. The 200-day moving average has actually looked more like a cap after the index initially approached it around 3 weeks back.

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< figure class =" media-object-image. While some selling interest is most likely around that level, the market isn't overbought, which indicates the "risk-on" momentum might power the index to additional gains.

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