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S&P 500 Declines Below 3960 As Energy Stocks Pull Back

By:
Vladimir Zernov
Updated: Nov 20, 2022, 10:00 UTC

NASDAQ Composite settled below the 11,100 level.

WTI Oil

In this article:

Key Insights

  • Energy stocks reacted to the strong sell-off in oil markets. 
  • Tech stocks have also moved lower, pushing the tech-heavy NASDAQ Composite below the 11,100 level. 
  • Some market segments are gaining ground today, indicating that the general market sentiment remains somewhat bullish. 

The Sell-Off In Oil Markets Hurts S&P 500

S&P 500 pulled back towards the 3940 level as tech and energy stocks moved lower. The tech-heavy NASDAQ Composite was down by 0.6%.

Energy stocks have been among the worst performers in the S&P 500 amid a strong pullback in oil markets. Diamondback Energy, EOG Resources, and Pioneer Natural Resources were down by 3-4% in today’s trading session.

Leading mega cap stocks like Microsoft, Alphabet, Amazon, and Tesla, have also found themselves under material pressure today, which was bearish for the S&P 500. NVIDIA was down by 3% as traders continued to adjust their positions after the recent earnings report.

Treasury yields moved higher today, and the yield of 2-year Treasuries managed to settle back above the 4.50% level. While stock traders shrugged off hawkish comments from Fed’s Bullard, bond traders paid more attention to his words. In case Treasury yields move higher at a robust pace, S&P 500 will find itself under more pressure.

It should be noted that today’s pullback is not broad, and market segments like utilities, healthcare, and consumer defensive are moving higher, which means that the general sentiment remains bullish.

S&P 500 Tries To Settle Back Below The 3960 Level

S&P 500

S&P 500 failed to settle above the 3960 level and pulled back towards 3940. The nearest support level for S&P 500 is located at 3920. RSI is in the moderate territory, and there is plenty of room to gain downside momentum in case the right catalysts emerge. If S&P 500 declines below the support at 3920, it will move towards the next support level at 3885. A successful test of this level will open the way to the test of the support at 3865.

On the upside, S&P 500 needs to settle back above 3960 to have a chance to gain upside momentum in the near term. The next resistance level for S&P 500 is located at 4000. If S&P 500 gets above this level, it will head towards the resistance at 4015. A move above 4015 will push S&P 500 towards the resistance level at 4040.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

Vladimir is an independent trader and analyst with over 10 years of experience in the financial markets. He is a specialist in stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading.

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