Vanguard S&P 500 ETF weakened after analysts warned that March might bring more pain for the stock markets

Written by: Stanko Iliev
February 27, 2021
  • Vanguard S&P 500 ETF continues to trade in a bull market
  • According to some analysts, March may bring more pain for stock market investors
  • The market has already priced in U.S. President Joe Biden's $1.9 trillion stimulus package

Vanguard S&P 500 ETF has advanced from $335 above $362 since the beginning of January, and the current price stands around $349. The price of this ETF continues to trade in a bull market, and according to technical analysis, there is still no sign of the trend reversal.

Fundamental analysis: March may bring more pain for stock market investors

Vanguard tracks the S&P 500 and gives you exposure to 500 of the most significant public companies in the United States. This ETF price weakened last week, but it still continues to trade in a bull market.

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Some analysts warn of an ‘epic’ bubble amid fears that stimulus flow has created extreme overvaluation while disappointing economic data continue to be dismissed. Wall Street’s three main indexes weakened last trading week as rising treasury yields continue to spook investors.

The U.S. 10-year Treasury yield hit a one-year high and rose above the S&P 500 dividend yield. Investors took some gains off stocks’ growth areas and moved them to more conservative areas for higher yields in the bond market.

According to some estimates, March may bring more pain for stock market investors, and if this happens, the Vanguard 500 ETF will probably be at lower price levels.

“Typical March trading comes in like a lion and out like a lamb with strength during the first few trading days followed by choppy to lower trading until mid-month when the market tends to rebound higher. Further consolidation is likely in March, but we expect the market to find support shortly and subsequently challenge the recent highs again,” said analyst J. Hirsch.

The market has already priced in U.S. President Joe Biden’s $1.9 trillion stimulus package, while the U.S. Federal Reserve announced that it would support the economy as long as the pandemic keeps taking its toll on economic progress.

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Technical analysis: Vanguard 500 ETF continues to trade in a bull market

The U.S. stock market could weaken even more in the upcoming weeks, but for now, this ETF remains in the “buy” zone, and there is no indication of the trend reversal.

Data source: tradingview.com

The important support levels are $340 and $320, $360, and $370 represent the resistance levels. The trendline on the chart above also represents a firm support level, if the price breaks this trendline, it would be a firm “sell” signal, and we have a free way to $320. As long the price is above this trend line, this ETF continues to trade in a bull market.

Summary

Vanguard S&P 500 ETF continues to trade in a bull market, and according to technical analysis, there is no sign of the trend reversal. According to some analysts, March may bring more pain for stock market investors, and if this happens, the Vanguard 500 ETF will probably be at lower price levels.