On the daily chart below, we can see that the price has pulled back into the strong support that now turned into resistance at 11492. The moving averages signal that we are in a bearish trend and the recent fundamentals are pointing to more losses for the stock market.
The ISM Manufacturing PMI “prices paid” sub-index jumped back into expansion and Fed’s Waller yesterday said that they will likely need to go above their projected terminal rate in December 2022.
On the 4 hour chart below, we can see more closely the price action around the key 11492 level. The market is consolidating a bit here and we may get a more directional action today depending on the ISM Non-Manufacturing PMI report.
We are likely to see a strong bearish move if the data beats expectations, especially the “prices” sub-index. On the other hand, a miss across the board would give the buyers conviction to break above the resistance and target the 11630 level.
On the 1 hour chart below, we can see that the price is now at a trendline. This is a good spot for the aggressive sellers as the potential downside is big and the risk is well defined in case the price breaks above the trendline and the resistance.
The recent S&P Global US PMIs, which are released before the ISM PMIs but cover the same month, showed another pick up in the services sector, so it may not be a bad idea for the sellers to position short into today’s report.
