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Fan Yang

S&P500 Heading to the 2018-Lows at 2540 with Downside Risk to 2400

We are seeing another round of sharp selloffs since last week. This sell-off in the S&P500 index is now breaking below the consolidation structure we seen since November and is likely going to test the low on the year around 2540.

S&P 500 Daily Chart

(click to enlarge)

2540 Will be Vulnerable:
- The market is likely going to drag the S&P500 down to its 2018-low. 
- Furthermore, the fact that price found resistance from the moving average cluster suggests strong bearish bias ahead.
- The RSI also held under 60, which suggests bearish momentum is still intact.
- With these bearish signs, I would not rely on the 2540 for support.
- I think we are likely going to fall towards the next support area between 2400 and 2425.
- Note that if price gets to the 2400 area, it will be around the 200-week simple moving average (SMA), which could be another factor the market looks for to anticipate support.
- Below 2400, the next key 

S&P 500 Weekly Chart

(click to enlarge)

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