$SPX Sell-Off, $QQQ Hits $577.5, $IWM Breaks Down
The stock market is struggling. With a rapid sell-off, the $S&P 500(.SPX)$ is down -5.41% in March alone and is heading toward correction territory. For now, the “vanishing bounces” continue; this was the seventh out of the last eight weeks to feature this pattern. This typically means a green opening driven by extreme oversold conditions, followed by a fading rally.
Lately, the sell-offs have accelerated earlier in the week. While the S&P 500 recovered its Central Weekly Level of $6,700 on Monday, the price action vanished on Tuesday, and the decline intensified by Wednesday when that level flipped to resistance. Our downside levels were met: $6,555 acted as first line on defense on Thursday, and then $6,479 is where the price bounced on Friday.
These modeled support and resistance levels continue framing the price action for the week ahead.
These price levels were published on Friday ahead of the weekly activity, you can see how accurate they are to frame price action, the price layers for next week are below.
$Invesco QQQ(QQQ)$ opened above the CWL of $599, which was our “line in the sand” for bulls (CWL). Tuesday’s indecisive action signaled weakness, leading to an accelerated sell-off on Wednesday. While there was a temporary reversal attempt on Thursday, it failed to close in positive territory, and the QQQ bounced from its bearish extension target of $577.5 for the week that just ended, the levels for next week are below.
$iShares Russell 2000 ETF(IWM)$ : Already down -7.18% for the month. The bearish target of $241 was reached. After failing to consolidate the CWL on Monday and Tuesday, and on Wednesday $249.1 acted as firm resistance following the Federal Reserve’s announcement.
Geopolitical Context: As mentioned in recent Market Intelligence editions (links below), geopolitical uncertainty adds a layer of complexity that economic data cannot account for. Unlike an earnings or an economic report, there is no scheduled time for attacks on energy facilities. With both the U.S. and Iran showing no willingness for a ceasefire, the market remains sensitive to potential oil spikes and escalating fear.
Oil stabilized this week (-1.37%) at historical overbought conditions relative to weekly technical indicators while volatility remains above 25. If a resolution is not reached quickly, the resulting impact on inflation and the Fed’s pathway could lead to further structural decline in the stock market.
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