Fundamental Overview
The S&P 500 has been on a sustained rally ever since the last FOMC decision with the market continuing to price in a back-to-back 50 bps cut in November. More recently, the PBoC surprised with strong easing measures as Chinese officials seem to have finally decided to go bigger. The market might now looking forward to a pick-up in global growth.
On the economic data side, the latest US consumer confidence surprised to the downside with worrying labour market data, but the market quickly faded the reaction. One possible reason could be that the data didn’t incorporate the latest Fed’s decision so the market might want to wait a bit more to see if things pick up in the next months.
S&P 500 Technical Analysis – Daily Timeframe
On the daily chart, we can see that the S&P 500 continues to print new all-time highs supported by the dovish market pricing and more recently the strong Chinese easing measures. From a risk management perspective, the buyers will have a better risk to reward setup around the previous all-time high around the 5720 level. The sellers, on the other hand, will want to see the price breaking lower to position for a drop into the trendline.
S&P 500 Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we had some consolidation recently around the highs but the price broke out overnight and extended the gains into new highs. If we get a pullback, the buyers will likely step in around the 5800 level to position for the continuation of the uptrend. The sellers, on the other hand, will want to see the price breaking lower to pile in for a drop into the 5720 level.
S&P 500 Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more clearly the recent price action with the breakout of the ascending triangle overnight. There’s not much else to add as the buyers will want to wait for a pullback, while the sellers will look for the price falling back below the 5800 level to invalidate the bullish setup and position for the drop into the 5720 level. The red lines define the average daily range for today.
Upcoming Catalysts
Today we get the latest US Jobless Claims figures, while tomorrow we conclude the week with the US PCE report.
