Stocks closed lower for the fourth week as investors worried about U.S. economy growth signaled by inverted yield curve and rising trade tension with China and Mexico. May turned out to be the worst month for stocks since December 2018. For the week, S&P 500 index closed at 2752 down 2.62%, Dow Jones Industrial Average lost 3.01% and technology laden NASDAQ composite index decreased 2.41% for the week.
After 2 successful tests at 28 week exponential moving average, S&P 500 index plunged below the support and closed 1.6 % below its 28 week EMA at 2752. Our market outlook is turning bearish as the index is firmly below its trend line. As the market sentiment has been so overwhelmingly negative and need some relief, we may see a rebound rally next week. However, the 28 week EMA once broken has become a resistance and we don think it will be broken even if a rebound does occur next week.
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| Weekly chart of S&P 500 index |
After 2 successful tests at 28 week exponential moving average, S&P 500 index plunged below the support and closed 1.6 % below its 28 week EMA at 2752. Our market outlook is turning bearish as the index is firmly below its trend line. As the market sentiment has been so overwhelmingly negative and need some relief, we may see a rebound rally next week. However, the 28 week EMA once broken has become a resistance and we don think it will be broken even if a rebound does occur next week.
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