On the daily chart below for the S&P 500, we can see that the price is again threatening a breakout of the key 4175 resistance level. The buyers have tried to break above this level several times without success. Will this time be different?
At the moment, the market is trading on the expectations that the Fed will be done tightening at the May meeting and inflation will fall back to 2% without a bad recession. The moving averages are well crossed to the upside and will act as support for the buyers in case we see another rejection of the resistance level. The trendline will also be eyed as further support.
S&P 500 technical analysis
In the 4 hour chart below, we can see more closely the struggle to break above the 4175 level with recent attempts all failing. This has created a little range right at the resistance and a break above should lead to an aggressive rally as the buyers are likely to jump in and the sellers are likely to fold. We can also see that there’s a divergence with the MACD although it may not be as reliable in a range as when it’s between two different higher highs.
In the 1 hour chart below, we can see a mini range forming just below the resistance. The sellers are likely to lean on this resistance targeting the bottom of the range at 4100. The buyers, on the other hand, will want to see the price breaking above the level. Today we have the US Retail Sales report and we may see the buyers winning in case the data beats expectations and the sellers taking control in case the data misses.
