Last Friday, the S&P 500 pulled back as a hot US PPI report weighed on the market. In fact, the Treasury yields rose, and the rate cuts expectations got trimmed some more as fears of stickier inflation started to creeping in. The Fed members though keep on dismissing the latest figures as something expected and continue to repeat that the disinflationary trend remains intact. This suggests that the Fed is not even considering rate hikes and in the worst-case scenario could just delay rate cuts. The market might continue to like this as long as the economic data remains good. Today the market will be closed for the Presidents Day and will resume trading tomorrow.
S&P 500 Technical Analysis – Daily Timeframe
On the daily chart, we can see that the S&P 500 last Friday fell into the close following a hot US PPI report. The market recently bounced on the trendline as the buyers continue to pile in at every pullback to position for new all-time highs. The sellers should wait for the price to break below the trendline and the red 21 moving average before even considering shorting this market.
S&P 500 Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we had also the 61.8% Fibonacci retracement level adding extra confluence around the trendline. There’s not much to glean from this timeframe so we need to zoom in to get some more details.
S&P 500 Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a support zone around the 4995 level where we can find the confluence with the red 21 moving average and the 38.2% Fibonacci retracement level. This is where the buyers will likely pile in again with a defined risk below the trendline to position for a new all-time high. The sellers, on the other hand, will want to see the price breaking below the trendline to position for a drop into the 4923 level and in case of a break lower, target the 4846 level next.
Upcoming Events
This week is basically empty on the data front with just the release of the FOMC Meeting Minutes on Wednesday followed by the US Jobless Claims and the US PMIs on Thursday.
