Technical Analysis

S&P500 (SPX) Price Analysis – March 13, 2023

By LonghornFX Technical Analysis
Mar 13, 20233 min

Daily Price Outlook

The S&P500 is trading at 3,861.59, down by 1.45% in 24 hours. Stock markets have fallen due to stronger-than-expected NFP data, and worries about bank contagion after the failure of SVB.

The collapse of Silicon Valley Bank

Silicon Valley Bank (SVB) Financial Group's surprise failure and FDIC seizure on Friday motivated a fast Fed meeting on Monday. The US authorities responded to limit the consequences of the unexpected collapse.

The Federal Reserve acted quickly to loosen the limits on bank borrowing. Furthermore, the White House promised to pay any withdrawals for SVB depositors.

The Fed and the FDIC are making great efforts to ring-fence SVB and stop contagion, but this worry is disturbing the market. Investors also believe that the Fed is far less likely to raise interest rates since doing so could bring down any other banks. According to the Fed Rate Monitor Tool, more traders anticipate a 25 basis point increase in interest rates from the Fed this month versus a 50 basis point increase.

Although depositors are likely to withdraw their funds from the bank, there are concerns about contagion. As a result, global markets closed the week in a sharp decline, with the S&P 500 Index closing at its lowest level in more than two months.

US NFP report

The US non-farm payroll statistics released on Friday showed 311k new employment opportunities occurred last month versus the 224k anticipated. Moreover, the unemployment rate grew from 3.4% to 3.6%, while average hourly wages only increased by 0.2%.

Overall, this news would have probably been a bit optimistic for the US Dollar if not for the worry of bank contagion.

The outcome was a sharp decline in the dollar relative to a basket of currencies, with DXY trading at 0.76% and down at 103.78. The current price of the US 10-Year Bond Yield is 3.670%, down by 0.68%.

Looking ahead, traders are looking forward to the release of the US consumer price index on Tuesday.

 S&P500 Price Chart - Source: Tradingview

S&P500 Intraday Technical Levels

Support      Resistance

3879            3988

3839            4057

3770            4097

Pivot Point: 3948

S&P500 – Technical Outlook

The S&P 500 (SPX) has faced resistance near the $4,060 level, which is extended by a 50% Fibonacci retracement mark, causing the index to drop again from a technical perspective. Candles closing below this level are keeping SPX in a sell zone, and the "three black crows" pattern in the 4-hour timeframe adds to the bearish bias among investors.

The SPX's immediate resistance level is $4,095, supported by a 61.8% Fibonacci correction level on the upside. A bullish breakout above the $4,035 level may lead to further gains toward the $4,200 mark. However, in the event of a breakdown below the support level of $3,930, the SPX may drop toward the next support level at $3,880.



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