S&P 500 Technical Analysis

the S&P 500 finished the day negative as some weak US data started to weigh
a bit on sentiment. The ISM PMIs recently missed expectations with notably the
employment indexes showing contraction. The ADP
yesterday missed forecasts and the Job
were lower than expected with negative revisions to the prior figures.
Moreover, we had Fed Chair
testifying to Congress, but he basically reaffirmed their patient
approach stressing that the timing for rate cuts will be determined by the
incoming data.

S&P 500 Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the S&P 500
bounced around the trendline where we
had also the confluence with the
red 21 moving average and the
previous resistance turned support. This is
where the buyers stepped in with a defined risk below the trendline to position
for a rally into new highs. The sellers, on the other hand, will want to see
the price breaking lower to invalidate the bullish setup and position for a
drop into the next support at 4946.

S&P 500 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we
had also the confluence of the 50% Fibonacci
level at the 5048 support. The divergence with
the MACD has
been going on for a long time and it’s generally a sign of weakening momentum
often followed by pullbacks or reversals. In this case, it’s been signalling
pullbacks to the previous swing levels where we continuously found dip-buyers.
A break below the trendline would confirm a reversal and we could even see a
selloff into the 4700 next.

S&P 500 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the
latest leg higher diverged with the MACD and led to a pullback into the support
zone around the 5048 level. The buyers piled in with a defined risk below the
trendline to target new highs. If the price were to fall back into the support,
we can expect the buyers to defend the level again as a break below it would
likely trigger a selloff into new lows.

Upcoming Events

Today we get the latest US Jobless Claims figures,
while tomorrow we conclude the week with the US NFP report.

This article was written by FL Contributors at www.forexlive.com.

Go to Forexlive

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