Last week, the S&P 500 surged to new highs following the surprisingly dovish FOMC decision where the Fed increased the rate cuts expected in 2024 to three and Fed Chair Powell delivered some dovish comments. In the last part of the week, we got a slate of soft-landing data as the US Jobless Claims and Retail Sales beat expectations, while the US PMIs missed on the manufacturing side and beat on the services one.
S&P 500 Technical Analysis – Daily Timeframe
On the daily chart, we can see that the S&P 500 last week broke above the cycle high and surged to new highs with the index now being roughly 2% away from the all-time high. This rally from the end of October has been really aggressive with very shallow pullbacks and it looks more and more driven by FOMO. The buyers should be on the lookout for bearish catalysts as those can trigger some nasty selloffs given the parabolic move of the last two months.
S&P 500 Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that from a risk management perspective, the buyers would be better off to wait for a pullback into the trendline where they will find the confluence with the 50% Fibonacci retracement level and the red 21 moving average. The sellers, on the other hand, will want to see the price breaking below the trendline to pile in and position for a drop into the swing low at the 4540 level.
S&P 500 Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the consolidation that’s been going on since the day after the FOMC decision. Some aggressive buyers might lean already on the red 21 moving average to position for another rally. If the price breaks below the swing low at 4693 though, we can expect the sellers to pile in to target a drop into the trendline and upon a further break lower, extend the selloff into the 4540 level.
Upcoming Events
This week is a bit empty on the data front as we head into the Christmas holidays. On Wednesday, we have the US Consumer Confidence report. On Thursday, we get the latest US Jobless Claims data, while on Friday we conclude the week with the US PCE report.
