SPXS breaks below 200-day moving average for the first time since March 6th
Direxion Daily S&P 500 Bear 3X (SPXS) Technical Analysis Report for Mar 26, 2020 | by Techniquant Editorial Team
Moving lower for the 3rd day in a row, SPXS ended Thursday at 15.57 losing $3.37 (-17.79%) on high volume. Today's close at 15.57 marks the lowest recorded closing price since March 5th. The bears were in full control today, moving the market lower throughout the whole session. Closing below Wednesday's low at 16.69, the ETF confirmed its breakout through the prior session low after trading up to $1.40 below it intraday.
Daily Candlestick Chart (SPXS as at Mar 26, 2020):
Thursday's trading range has been $3.09 (16.86%), that's slightly below the last trading month's daily average range of $3.20. Things look different on the weekly timeframe, where the market's trading range of the last week has been way above the market's average weekly trading range. The longer-term, monthly volatility is currently significantly higher than usual for SPXS.
One bearish candlestick pattern matches today's price action, the Black Candle.
After trading down to 15.29 earlier during the day, the market bounced off the key technical support level at 15.49 (S1). The failure to close below the support could increase that levels importance as support going forward. Direxion Daily closed below the 200-day moving average at 16.23 for the first time since March 6th. When this moving average was crossed below the last time on March 2nd, SPXS actually gained 8.60% on the following trading day.
SPXS shows weakness in the short-term (in accordance with its long-term downtrend) with only the medium-term trend still being bullish.
With prices trading close to this year's low at 11.30, downside momentum might accelerate should the ETF break out to new lows for the year. As prices are trading close to March's low at 13.66, downside momentum could speed up should the market mark new lows for the month.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Support/Resistance based market condition "Bounced off Technical Resistance R1" stand out. Its common bearish interpretation has been confirmed for Direxion Daily. Out of 383 times, SPXS closed lower 63.45% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after 10 trading days, showing a win rate of 68.41% with an average market move of -1.78%.