Yesterday, the S&P 500 continued to retreat from the highs as the market is waiting for the key catalysts in the next few days and weeks. Nothing has changed in the bigger picture as the Fed is still considering rate cuts conditional on the disinflationary trend being intact. The data has been good but what will matter the most is the next CPI report as that will tell us if the progress on inflation has indeed stalled, or worse, reversed. Before that we will get many important reports including the NFP, but as long as they remain benign the market will likely keep on rising.
S&P 500 Technical Analysis – Daily Timeframe
On the daily chart, we can see that the S&P 500 is now near the key trendline where we can also find the blue 8 moving average for confluence. This is where we can expect the buyers to step in with a defined risk below the trendline to position for a rally into new highs. The sellers, on the other hand, will want to see the price breaking lower to position for a drop into the 4920 level.
S&P 500 Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a strong support zone around the 5050 level where we can find the confluence with the trendline, the 38.2% Fibonacci retracement level and the red 21 moving average. This makes this level significant as a strong bounce will likely lead to new highs while a break lower could trigger a quick selloff into the 4920 level.
S&P 500 Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the bullish setup around the 5050 level. What happens at this zone will likely decide where the price will go in the next few days and weeks.
Upcoming Events
Today we will see the US PCE and the latest US Jobless Claims figures, while tomorrow we conclude the week with the US ISM Manufacturing PMI.
