On the daily chart below, we can see that the resistance at 4175 managed once again to stop the buyers. The recent hot economic data is weighing on the index as the market is repricing a higher terminal rate.
The minor upward trendline got breached last Friday as Fed’s Bullard (hawk, non-voter) said he was open for a 50 bps hike and a higher terminal rate. This is tilting the price action to a bearish bias. The moving averages are also on the verge of turning south signalling a possible change in trend.
In the 4 hour chart below, we can see that the price is now bouncing from a previous swing support and it’s now likely to pullback to the previous swing resistance which has a 38.2% Fibonacci retracement level as confluence.
The moving averages are pointing south, although in a ranging price action they can give false signals, so it would be better to wait for a clear break down of the 4060 support before having conviction in a downtrend.
In the 1 hour chart below, we can see the recent catalysts that weighed on the S&P500 . Since the blockbuster NFP report 2 weeks ago, the market hasn’t really done much. It’s been pure choppiness hinting to uncertainty from both sides. This is the toughest environment for traders.
The 4099 resistance is likely to be the decision maker for the next move. The sellers are likely to lean on that strong resistance to target a break down of the 4060 support. If the buyers manage to break the 4099 resistance to the upside, then we may see again an extension to the resistance at 4175.
