Jim Cramer Analyzes S&P 500 and XLK Technicals Amid Trade War Concerns

Technical Analysis of S&P 500

• 📉 The S&P 500 is described as a textbook ugly chart with a series of lower lows and lower highs, indicating a new downtrend.
• ⚠️ A bearish trading cycle is present, with the 13-week, 26-week, and 40-week moving averages all sloping downward and acting as resistance.
• 🎯 The 13-week moving average at 5747 is identified as the first ceiling of resistance, approximately 350 points above the current trading level.
• ⚠️ Breaking out above the lower low from the week of March 10th (5504) is a significant hurdle, as major defensive lines have been breached and become barriers.
• 📉 The 13-week moving average falling below the 40-week moving average is a very bad sign for chart watchers, suggesting further downward pressure.
• 💡 The S&P 500 bottomed when it approached the lower Bollinger Bands, a level reflecting volatility.

S&P Equal Weight Analysis

• 📊 The S&P 500 equal weight index is also not performing well, but has found support at a level where it has bottomed many times previously.
• ⚠️ However, it closed below 6691 on Friday, the level where it peaked in January 2022 before the Fed started raising rates, wiping out three years of gains.
• 📌 Getting back above 6691 is crucial for the S&P equal weight to avoid painting an ugly picture.

Technology Sector (XLK) Performance

• ⚡ The Technology Select Sector SPDR Fund (XLK) has fallen below its 13-week, 26-week, and 40-week moving averages, all tilting lower, indicating a bearish trading cycle.
• 🎯 The XLK has found a floor of support at its 200-day moving average, around 172, which is approximately 30 points below its current trading level.
• ⚠️ A breakdown below 205 was previously identified as a potential nightmare scenario, and the index has since fallen below this level.

Individual Stock Insights

• 📈 Salesforce stock has declined significantly due to an inability to monetize its product effectively, despite having a strong product offering.
• ⚠️ Micron is trading at 10 times earnings, with the speaker having preferred it at 6-7 times earnings; it's considered a one-way stock with a great year followed by a bad year.
• 📍 A quarter position in Micron can be considered, with a plan to buy more if it drops to 61, but it is not seen as a strong upward trending stock.

Overall Market Outlook

• 📌 The S&P 500, S&P equal weight, and XLK tech fund are all being supported by their 200-day moving averages, suggesting that for the moment, the downside looks contained.