U.S. equities continued their downtrend with the S&P500 closing off 1.08 percent on the day. The chart below illustrates how the mid-day hard sell-off in Apple took the S&P500 with it (see here for Apple’s leadership role). The market was not impressed, at least for today, with the company’s new product introduction at the annual developer conference and sold the stock down $5.40 or 1.57 percent.
All three of the S&P500 short-term support levels we mentioned in earlier posts have now been taken out. The current sell-off feels a lot worse than the 5.7 percent as detailed in the table below. A large driver of volatility is the dynamic between perception and reality and it kind of feels to us the market perceives stock prices should be lower.
We now view the 200-day moving average, currently sitting at 1249.09 (moving averages are dynamic), or about 3 percent lower, as critical and very important support. The 200-day also, interestingly, coincides with the March 16th low of 1249.05. If you believe in lucky numbers, a move to and bounce off the 200-day at 1249-ish would result in an 8.88 percent correction from the May 2nd intraday high of 1370.58. How Feng shui!
(click here if charts are not observable)