(Bloomberg) -- Around this time a month ago, equity bulls cheered as the S&P 500 broke above a key technical level after a torrid rebound from the coronavirus-driven selloff.
Now they’re fixated on the 200-day moving average again as a spike in virus cases spurs market gyrations. The indicator -- currently at 3,020 -- is seen as a proxy for changes in the market’s long-term trend. The U.S. equity benchmark sank the furthest below that level than its been in decades at the depths of the rout in March.
Over the past couple of weeks, the S&P 500 appears to be forming a new floor at the 200-day line. It came within 4 points of it on Thursday before bouncing back.
“Though the S&P 500’s cross above the 200-day moving average gives some assurance of a better price trend, it usually foretells a less comfortable period of consolidation, one that should include very little breakdown in the momentum or signals to ensure an intact bull,” Gina Martin Adams, chief equity strategist at Bloomberg Intelligence, wrote in a research note Thursday.
Matt Maley, chief market strategist at Miller Tabak + Co, is keeping his eye on the 3,000 level -- another key support.
“That was the low on June 11 and thus a meaningful break below that level would give us a key ‘lower-low’ and would tell us that the ‘critical juncture’ we’ve been talking about over the past two weeks was resolved to the downside,’” Maley said in an email Thursday.
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