Yesterday, the S&P 500 finished the day positive as the lack of bearish catalysts continues to support the market. In fact, the path of least resistance remains to the upside as growth and employment stay resilient, and the Fed continues to signal three rate cuts this year even if inflation reaccelerates a bit.
S&P 500 Technical Analysis – Daily Timeframe
On the daily chart, we can see that the S&P 500 has been diverging with the MACD for a long time. This is generally a sign of weakening momentum often followed by pullbacks or reversals. In this case, it led to pullbacks into the red 21 moving average and the trendline where the dip-buyers kept on stepping in to position for the rallies into new highs. The sellers might want to wait for the price to break below the trendline before even considering going short in this market.
S&P 500 Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that from a risk management perspective, the buyers will have a much better setup around the trendline where we can also find the confluence with the 38.2% Fibonacci retracement level and the red 21 moving average. The sellers, on the other hand, will want to see the price breaking lower to invalidate the bullish setup and position for a bigger correction to the downside.
S&P 500 Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that the price bounced on the 38.2% Fibonacci retracement level but didn’t fall all the way back to the trendline. We can also notice that we have an important level at 5230 where the price reacted to several times. If we get a retest of this level, we can expect the buyers to step in to position for even higher prices.
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