Benzinga -
- The S&P 500 is experiencing its third consecutive day of decline, with a drop of 2.61%.
- The critical psychological support level of $4,000 is essential for the index.
- Despite the recent downturn, the S&P 500 has posted a gain of 5.47% for the year.
As the S&P 500 (ARCA: SPY) faces its third consecutive day of decline, traders and investors should be keeping an eye on this bearish move during uncertain times.
The index has dropped by 2.61%, failing to find its footing amidst resistance at the $4,195 level, which has now prevented price from advancing on two occasions.
Recent attempts to breach the resistance zone have failed. Both April 18th and May 1st saw efforts to break the ceiling, but the buyers were met with a brick wall each time, pushing price back down.
As a result, the focus is on the next level of support below, as price is sliding towards the $4,000 level.
This key psychological support level at $4,000 remains critical for the index.
If the price fails to hold above this level, the daily 200 simple moving average (SMA) lies just below that, offering another potential layer of support. Investors will be monitoring this closely to gauge the market's next move.
Despite the recent downturn, keeping the broader picture in perspective is essential. The S&P 500 has still managed to post a gain of 5.47% for the year, demonstrating resilience and consistency despite major hurdles ahead.
While the overall market declined on Thursday, two sectors emerged as bright spots and closed with gains.
The Utilities sector ended the day on a high note, up by 0.73%, while the Real Estate sector was ahead, closing with a 0.93% gain.
Investors now wait in anticipation to see if there is a strong bounce from support and a continuation of the long-term bull trend. The important thing here is to remain prepared and apply patience.
After the closing bell on Thursday, May 4, the index closed at $401.23, trading down by 0.72%.
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