Market Analysis: E-mini S&P 500 Price Drops to Lowest in a Month


Yesterday, the S&P 500 fell below the 4,440 level — the last time the price of the S&P 500 was this much was on July 12.

The following contributed to the decline in the stock market:
→ strong US retail sales data (actual: +0.7%, expected +0.4%, last month: +0.2%). Market participants fear that interest rates may remain high for longer;
→ information that Fitch may downgrade further.

Thus, the decline amounted to more than 3.5% from the highs of the year recorded at the end of July. Will the decline continue? MarketWatch published the opinion of stock market strategist Hayes Martin: the correction could continue from 8% to 13%. However, the good news is that, according to the strategist, it will not break the current bull market.

Bullish arguments for the 4-hour chart:
→ the price is at the lower border of the descending channel (shown in red), which gives reason to expect a rebound;
→ many technical indicators (for example, stochastic) show oversold conditions;
→ this morning the E-mini S&P 500 did not develop a fall — perhaps yesterday's fears were emotional.

Bearish arguments:
→ the level 4,460 can serve as resistance;
→ the median and upper line of the red channel can also provide resistance.

An important factor that will affect the price of the E-mini S&P 500 will be information from the FOMC (to be published today at 21:00 GMT+3). Bloomberg writes that the topic of discussion at the Fed is changing from "how high should the rate be" to "how long will it be held at a high level." Get ready for spikes in volatility tonight.

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