S&P 500 may face selling pressure as systematic funds reach full exposure
The S&P 500 (SPX) retracted its Monday gains yesterday, but still showing only a minor impact on short-term market indicators according to Fairlead Strategies.
The technical analysis firm pointed out that the index has encountered resistance around the breakdown point of approximately 5783, which has been a challenging hurdle.
However, Fairlead Strategies anticipates that this resistance level will likely be overcome next week, as suggested by the bullish posture of the daily Moving Average Convergence Divergence (MACD) indicator.
Fairlead Strategies also provided insights into the intermediate-term market trends. Their indicators imply that the current market correction, which has been affecting the SPX, is expected to continue from the middle to the latter part of April.
The Chicago Board Options Exchange Volatility Index (VIX), often referred to as the market’s "fear gauge," has shown signs of a temporary stabilization. This observation comes in response to a counter-trend signal detected by the DeMARK Indicators, a suite of market-timing tools.
The VIX is anticipated to experience around three more days of stabilization, which aligns with a brief pause in the SPX rally.
Following this short period of steadiness, the VIX is expected to continue its downward trajectory towards a support level just below 15.0.
This prediction is supported by a downturn in the weekly stochastics, which are momentum indicators that compare the closing price of a security to its price range over a specific period.
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