On the daily chart below, we can see that the price action remains rangebound beneath the key 4175 resistance level. The market has been trying to break above this resistance since last December, but it just keeps failing. The buyers are trading on the expectation that we get a soft landing where unemployment doesn’t increase much, and inflation comes back to target naturally.

The sellers, on the other hand, expect a hard landing where unemployment does spike, or the Fed’s tightening breaks something in the economy like we’ve seen with the regional banking sector crisis. Until a major catalyst comes into the equation, it looks like we will keep on experiencing such rangebound markets.

S&P 500 technical analysis

In the 4 hour chart below, we can see more closely the range between the resistance at 4175 and the support at 4061. These are the key levels traders will focus on as a breakout on either side increases the chances of a major move, especially if it’s going to be supported by a fundamental catalyst. The best way to approach such a market is to just sit out and wait, preserving the capital for better times. Otherwise, one can also “play the range” buying at support and selling at resistance.

In the 1 hour chart below, we can see that we have a mini range within the bigger range. We got a dip into the 4120 support as the University of Michigan report missed expectations across the board and the long term inflation expectations surprised with a big jump. Fed Chair Powell once mentioned that they consider those expectations, so the sellers may have thought that the Fed may raise rates again in June. Although this reaction is understandable, the Fed may want to see another NFP and CPI report before going ahead with another hike as they have already leant in favour of a pause. Anyway it’s all about being patient now and wait for a breakout.