Yesterday, the S&P 500 remained under pressure as the market continued to reprice the aggressive rate cuts expectations following Fed’s Waller comments. Moreover, the economic data surprised once again to the upside with the US Retail Sales beating expectations across the board and Industrial Production edging up. Overall, the soft-landing narrative is still intact but in the short term the market is readjusting to tighter monetary conditions.
S&P 500 Technical Analysis – Daily Timeframe
On the daily chart, we can see that the S&P 500 fell again below the red 21 moving average as the bearish pressure remains strong. From a risk management perspective, the buyers will have a better risk to reward setup around the support at 4700. If the price breaks right through it, the sellers will increase the bearish bets into the 4547 level.
S&P 500 Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price was diverging with the MACD right at the all-time high. This is generally a sign of weakening momentum often followed by pullbacks or reversals. The target for the pullback should be right around the support zone at the 4700 level where we can also find the 38.2% Fibonacci retracement level for confluence. This is where the buyers should step in with a defined risk below the zone and target a new all-time high.
S&P 500 Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the current price action and we can see that we have a minor trendline defining the current bearish momentum. The sellers should lean around the trendline to position for a break below the support and target the 4547 level. The buyers, on the other hand, will want to see the price breaking higher to invalidate the bearish setup and increase the bullish bets into a new all-time high.
Upcoming Events
Today, we will see the latest US Jobless Claims figures, while tomorrow we conclude the week with the University of Michigan Consumer Sentiment survey.