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The S&P 500 faced strong resistance at the 200-DMA followed by a sharp drop approaching January 25 daily lows at 4,287. The S&P 500 plunges almost 1% during the New York session.
After the Federal Reserve announced that it keep the Federal Funds Rates (FFR) unchanged at the 0 to 0.25% range while signaling that they would hike rates “soon,” the S&P 500 plummets 1.09%. At the time of writing, the S&P 500 sits at 4,313.83.
From a technical analysis perspective, the S&P 500 failed to reclaim the 200-DMA, which sits at 4,432.65, eyeing the January 24 cycle low at 4,222.62, which was the low of the 12% correction that began on January 4.
The S&P 500 outlook is bearish biased, spurred in part by the US T-bond 10-year Treasury yield rising up to 1.84% The S&P 500 first support level would be the aforementioned January 24 low at 4,222.62. A breach of the latter would expose June 18, 2021, daily low, which previously tested the 50-day moving average (DMA) at 4,164.40, followed by May 19, 2021, daily low at 4,061.41.
To the upside, the S&P 500 first resistance would be 4453.23, followed by September 23, 2021, a daily high at 4,465.40. A break above that level would expose the 100-DMA at 4,570.04.
