The Standard & Poor’s 500 Index may extend this month’s slide after dropping below its 55-day moving average, according to Credit Suisse Private Banking.
The S&P 500 closed below its 55-day moving average for the first time in a month on May 23. This adds to an already “fragile” position that may drag the gauge to its next key short-term support levels at 1,295 and 1,305.8, according to Beat Grunder, the Zurich-based head of global technical research at Credit Suisse Private Banking. The lower of these levels is 1.6 percent below yesterday’s closing price of 1,316.28.
The S&P 500 has posted three straight weeks of declines since climbing to a three-year high on April 29 amid a commodity slump and concern that Europe’s debt crisis will derail the global economic recovery. Still, the benchmark has rallied 4.7 percent so far this year as the Federal Reserve extended its stimulus measures and companies posted higher-than-estimated profits.
“The whole environment shows there are no new catalysts after the earnings season,” Grunder said in a phone interview today from Zurich. “We have so much cash on the sidelines and have had fairly good earnings, but there’s no support for the market here.”
About 72 percent of the 460 companies in the S&P 500 that have posted results since April 11 have beaten analysts’ estimates for per-share profit.
In technical analysis, investors and analysts study price graphs to predict changes in a security, commodity, currency or index.