S&P 500 critical support under pressure! Breaching 6550 points may trigger a deeper pullback.

Notice that two weeks of market volatility have made American stock market investors eager to find direction in order to position themselves before the typically strong seasonal period arrives. Although the reasons for the intense market fluctuations last week are difficult to summarize, some bullish arguments have come under scrutiny. The concept of artificial intelligence is fading, certainty about the Fed's interest rate hike next month is wavering, and data shows that the economy is slowing down. Speculative bets such as Bitcoin and unprofitable tech stocks have been quickly closed out. After the dust settled, the S&P 500 index fell nearly 2% to 6602.99 points. However, during this process, the index tested some key technical support levels, leading analysts to carefully study charts to find support levels or signs of stabilization. Todd Sohn, Senior ETF and Technical Strategist at Strategas, said, "The lines for the coming weeks and months are being drawn, and whether it breaks upwards or downwards, it will be an important signal. Some of the lines are becoming important reference points." S&P 500 index breaks support level Last Thursday, the S&P 500 index broke below the 100-day moving average for the first time since February. A rebound on Friday brought it back above this average, but it failed to recover the 50-day moving average, which has started to flatten out, sending a negative signal. Joe Gilbert, Portfolio Manager at Integrity Asset Management, said, "We have started to reduce positions and if the S&P 500 falls below the next support level, we will take a more defensive strategy." Several strategists mentioned that they are focusing on the 6550 point level for the S&P 500 index, which is the index's low point in October. Last Thursday's sell-off caused the index to drop below this level, followed by a rebound on Friday. John Kolovos, Chief Technical Strategist at Macro Risk Advisors, pointed out that a clean break below the support level would trigger a decline towards 6400 points and then 6200 points, "completely exhausting the downward pressure that began at the end of October." He said that staying below 6550 points would be a "worrying situation" and could "affect the remaining trend for the rest of the year and possibly next year's market performance." Will Templin, Senior Analyst at Fairlead Strategies, believes that 6533 points is a "natural level for an oversold rebound" that could temporarily interrupt the pullback. The S&P 500 index has fallen 3.5% this month, marking its worst November performance since 2008. However, technical charts have not yet shown oversold levels typically indicating a rebound. Data from Wells Fargo shows that about 39% of S&P 500 components were trading above the 50-day moving average on Friday, higher than the usual 15%-20% level that usually signals a complete sell-off. This does not mean that the volatility will continue. Barclays' model shows that last Thursday's extreme volatility triggered an overnight buying signal. Alexander IAT Automobile Technology Mann, Global Head of Stock Tactical Strategy at the bank, said in a client report that their timing indicator fell below -7 for the first time since August 4, signaling a short-term uptrend for the S&P 500. A worrying signal for bulls is the elevated level of the Cboe Volatility Index. The index rose to 28.27 last Thursday before falling below 24 over the weekend, but it remains above the long-term average of 19, indicating that there may still be intense volatility or it is not over yet. Ali Wald, Technical Analysis Director at Oppenheimer & Co., said that the market will only stabilize when the S&P 500 falls to 6430, which is close to the significant Fibonacci retracement level of 23.6% from the low point in April. He said, "If the sell-off continues, 6430 could be the bottom for the S&P 500." Other analysts are looking for support from related factors. JC O'Hara, Chief Technical Strategist at Roth Capital Partners, pointed out, "Bitcoin should also be monitored, as in the past week or two, the trend of cryptocurrencies has led the S&P 500. Without Bitcoin finding support, it will be difficult for the stock index to find support. I believe that $75,000 is a key support level." Bitcoin fell to a low of $80,553.57 last Friday. Kolovos of Macro Risk Advisors wrote in a client report that even with the rebound last Friday, the "damage to the market's internal structure" is already present and is now at "one of the most important support levels since the low point in April."