The S&P 500 remains a notable chart to pay attention to, after having broken back above its 100-day moving average (red line) last Friday. There was a test of the key level yesterday but buyers held before a lack of any significant remarks by Powell provided some encouragement for dip buyers to win out at the end of the day.
Despite the technicals starting to look to favour an upside leg, trading this week is focused all around the US CPI data coming up tomorrow. That will be the key deciding factor for markets in terms of how we might look to really kick start the year.
For equities, it will be important to at least see another soft reading so as to vindicate the latest bounce in the S&P 500 following a fair bit of consolidation in the past three weeks.
That said, topside resistance is still largely intact in the form of the key trendline resistance (white line) from last year and the 200-day moving average (blue line) at 3,990. It will require a firm break above those levels to really justify any major shift in momentum for stocks, so we'll have to wait and see if the inflation numbers will provide a trigger for risk buyers to take action.
