Fundamental
Overview
The S&P 500 has been on the backfoot recently as the goldilocks data
led to a strong rotation into small caps stocks. Yesterday, there was general
weakness across all the indices although it wasn’t triggered by any catalyst. The
fundamentals haven’t changed, on the contrary, they strengthened the case for a
soft landing. People got too used to 1% pullbacks, but 3 to 5% pullbacks are
normal.
S&P 500
Technical Analysis – Daily Timeframe
On the daily chart, we can
see that in case pullback deepens further, the buyers will find a good support zone around the 5500 level where we can find
the confluence of the trendline and the 38.2% Fibonacci retracement level. The sellers, on the other
hand, will want to see the price breaking below the trendline to increase the
bearish bets into the 5200 level next.
S&P 500 Technical
Analysis – 4 hour Timeframe
On the 4 hour chart, we can
see that the bearish momentum increased on the break of the minor trendline as
the sellers added to the bearish bets. The price is testing a support zone around
the 5580 level where the buyers are piling in with a defined risk below it. If
the price were to break lower, the sellers will likely increase the bearish
bets into the 5500 support next.
S&P 500 Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, we can
see that we now have a minor downward trendline defining the current bearish
momentum. If we get a bounce from the 5580 support, we can expect the sellers
to lean on the trendline to position for a break below the support with a
better risk to reward setup.
The buyers, on the other
hand, will want to see the price breaking above the trendline to increase the
bullish bets into a new all-time high. The red lines define the average daily range for today.
This article was written by Giuseppe Dellamotta at www.forexlive.com.
