The Stock Market Chart Everyone Is Watching Right Now
The stock market has been experiencing a heightened level of volatility.
The S&P 500 closed at 1,661 yesterday, down 1.4%. And the all-time closing high of 1,709 two weeks ago is just getting farther away.
The chart watchers have noticed that the S&P 500 is getting dangerously close to falling below its 50-day moving average (DMA) of 1,656.
"The S&P 500 has tested its 50-day five times since the end of 2012," noted the folks at Bespoke Investment Group. "As shown below, the index held its 50-day the first three times it was tested, but after an initial hold on the fourth go-around, the support finally gave way to selling pressure after a few days. Will it hold again this time like the first three tests this year, or is a break coming?"
The 50-DMA may seem like a metric based on a somewhat random number. Nevertheless, a break below the 50-DMA would signal a significant shift in moment to the downside.
