Fundamental
Overview
The S&P 500 sold off
yesterday following the higher than expected US CPI report. Stocks didn’t extend to new lows
though as the market was aware of the “January-effect” and therefore didn’t put
much weight on this particular release.
What weigh more on the
market were the positive headlines on the reciprocal tariffs as the White House
adviser Hassett said that the reciprocal tariffs were a work in
progress and conversations with other countries began earlier that day,
potentially implying negotiations.
Moreover, we got a very
positive post from Trump saying that he had a call with
Putin and the tone of it was upbeat on a peace deal in the Russia-Ukraine war.
He was even invited to Moscow. That helped the risk sentiment and weighed on
crude oil (less inflationary pressures).
Both of those news gave the
market a boost and helped erasing the CPI losses. Today, the focus will be on
the US PPI data and the potential announcement of reciprocal tariffs.
S&P 500
Technical Analysis – Daily Timeframe
S&P 500 Daily
On the daily chart, we can
see that the S&P 500 has been stuck in a big range for almost four months
now. The market participants will continue to play the range until we get a
breakout on either side as that will likely increase the momentum and give us
the next impulse.
S&P 500 Technical
Analysis – 4 hour Timeframe
S&P 500 4 hour
On the 4 hour chart, we can
see that we have a smaller range between the 5960 support and the 6150 resistance. This could be a
signal that overall, the bullish view is more probable and that the buyers
remain in control. Again, there’s not much we can say here as what we need is a
breakout.
S&P 500 Technical
Analysis – 1 hour Timeframe
S&P 500 1 hour
On the 1 hour chart, we can
see that we have yet another tighter range between the 6020 support and the
6095 resistance. The sellers will likely step in around the resistance to
position for a drop back into the support, while the buyers will look for a
break higher to increase the bullish bets into the next resistance. The red
lines define the average daily range for today.
Upcoming
Catalysts
Today we get the US PPI, the latest US
Jobless Claims figures and the Trump’s reciprocal tariffs announcement.
Tomorrow, we conclude the week with the US Retail Sales data.
