Fundamental
Overview
The S&P 500 yesterday
rallied hard following the beat in the US ISM Services PMI where the data showed that the last
month drop was just a blip and overall we have a resilient economy with lower
inflationary pressures.
The data continues to reinforce the narrative that the
next move is more likely to be a rate cut, and that inflation is likely to keep
coming back to target. This should keep the market supported amid a positive
risk sentiment.
S&P 500
Technical Analysis – Daily Timeframe
S&P 500 Daily
On the daily chart, we can
see that the S&P 500 bounced recently around the 5200 level where we had
the confluence of the trendline and the 50% Fibonacci retracement level.
That’s where the buyers
piled in on the last day of the month fading the weakness from the month-end
flows. The sellers will need the
price to break below the trendline to turn the bias more bearish and start
targeting a drop into the 5000 level.
S&P 500 Technical
Analysis – 4 hour Timeframe
S&P 500 4 hour
On the 4 hour chart, we can
see that the price recently broke above the downward counter-trendline turning
the bias more bullish and extended the rally after the break of the 5313 level.
We are now seeing a bit of a rejection around the all-time high although there
are no bearish catalysts expected for today, so if we get a pullback, it will
likely be mostly technical.
S&P 500 Technical
Analysis – 1 hour Timeframe
S&P 500 1 hour
On the 1 hour chart, we can
see a good support
zone around the 5330 level where we can find the confluence of the upward
trendline and the 38.2% Fibonacci retracement level. If we get a pullback into
the trendline we can expect the buyers to lean on it with a defined risk below
it to position for a rally into new highs.
The sellers, on the other
hand, will want to see the price breaking below the trendline and the 5313
level to position for a drop into the major trendline around the 5250 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 NFP report.
