TraderEye Market View: S&P 500 Analysis: Key Support Levels Tested Amid Market Turbulence

Monday, March 10, 2025

S&P 500 Analysis: Key Support Levels Tested Amid Market Turbulence

Market Recap: Nasdaq 100 Drops 4%, Weighing on S&P 500

Yesterday, the Nasdaq 100 plunged by approximately 4%, marking its steepest decline since 2022. This sell-off rippled through the broader market, placing downward pressure on the S&P 500. The decline was largely fueled by renewed recession concerns and uncertainty surrounding new U.S. trade policies introduced by President Donald Trump. These policies have heightened investor anxiety, leading to increased volatility. (MarketWatch, Reuters)

Technical Analysis: Wave E Breakdown or False Move?

The S&P 500 has broken below the lower boundary of Wave E within a symmetrical expanding triangle formation. However, Elliott Wave Theory suggests that Wave E often experiences false breakouts, which means the current breakdown might not be decisive, and a reversal could still occur. (ElliottWave.com)

Critical Support Level at 5,555

Using Fibonacci retracement from the last major correction low to the S&P 500’s most recent peak at 6,146, the 78.6% retracement level aligns with 5,555—a crucial technical support zone. A sustained move below this level would warrant a reassessment of the market’s direction.

Looking Ahead

While technical indicators signal caution, the possibility of a reversal remains. Investors should closely monitor whether the S&P 500 reclaims lost ground or if further downside confirmation emerges. Key economic data releases in the coming days could provide additional market catalysts.

Legal Disclaimer

This analysis is for informational purposes only and does not constitute financial advice. The author is not a licensed investment advisor. Any investment decisions based on this information are at the reader's own risk. The financial markets involve inherent risks, including potential loss of capital. Readers should conduct their own research and consult a professional advisor before making investment decisions.

Attached: Daily chart of the S&P 500, highlighting the discussed technical pattern and key support level.

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