Conclusion, Investment Implications, Strategy

The benchmark S&P 500 (SPX) is in the early stages of a strategic (major) downtrend.  This morning’s sharply lower opening has positioned it just above primary support at 2856 to 2822, which is another 2.7% below the current level and 14.0% off the Feb 19th all-time high.

Introduction

In Tuesday’s (March 3rd) Special Report, we said:

“The benchmark S&P 500 (SPX) is currently testing major overhead resistance at 3050 to 3133, amid still-negative (bearish) market internals.  This is where the current major downtrend in the US broad market index — initiated on February 27th — must resume to remain intact.

Chart 1 below, an updated version of the one from that report, shows that SPX traded as high as 3137 on that date before collapsing by 4.4% back down to 3000 during yesterday’s (March 5th) session, 

Chart 1

This aggressive rejection of overhead resistance tells us the emerging major downtrend in the US broad market index is still intact.  Moreover, about 15 minutes into today’s session, SPX has collapsed by an additional 2.9% to 2935.

Know Your Levels Below The Market

Chart 2 below shows that primary support is currently at SPX 2856 to 2822, which is another 2.7% below the current level and 14.0% off the Feb 19th all-time high.

Chart 2

The next support level would be at 2729 to 2722, which represents the June and March 2019 benchmark lows.  It is an additional 3.3% below 2856-2822 and 20.0% off the Feb 19th high.

The next support level is at 2604, which would be is an additional 4.3% below 2729-2722 and 23% off the Feb 19th high.  It represents the October 2018 low and also the 61.8% retracement of the entire December 2018 to February19th advance.

Below there, the 2347 December 2018 low is an additional 9.9% below 2604 and 31% off the Feb 19th high.