FUNDAMENTAL
OVERVIEW
Things were looking pretty
dire for the S&P 500 just an hour ago as Trump’s ultimatum to Iran was
keeping traders on edge for fears of further escalation.
That’s now history though
as Trump’s ceasefire announcement on Truth Social turned markets around quickly
on expectations of a potential end to the conflict.
The downside for now will
likely remain limited but the risk that this is just Trump jawboning markets again might
also cap the upside. In fact, the Iranian side is saying that there were no direct or indirect contacts with the US.
US-Iran headlines will
continue to drive the price action, so traders will need to stay laser focused
and be nimble to adjust their positions.
S&P 500
TECHNICAL ANALYSIS – DAILY TIMEFRAME
On
the daily chart, we can see that
the S&P 500 probed below the November
lows and reversed strongly after Trump’s ceasefire. We can expect the sellers
to step in around the resistance at 6,760 where we have also the confluence of
the major trendline. The buyers, on the other hand, will want to see a breakout
to increase the bullish bets into new all-time highs.
S&P 500 TECHNICAL
ANALYSIS – 4 HOUR TIMEFRAME
On
the 4 hour chart, there’s not
much we can add as the sellers will likely step in around the resistance to target
a drop back into the 6,530 support, while the buyers will look for a breakout
to pile in for new highs.
S&P 500 TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we can
see that the price is trading much above the upper bound of the average daily range for today. This shouldn’t be
surprising given the importance of Trump’s post. In such instances though, we can
generally see some consolidation or a pullback before the next move.
UPCOMING CATALYSTS
Tomorrow we have the US PMIs. On Thursday, we get the latest US Jobless Claims
figures. As a reminder, the focus is mainly on the US-Iran war, so keep an eye
on the headlines.
This article was written by Giuseppe Dellamotta at investinglive.com.
