FUNDAMENTAL
OVERVIEW
The S&P 500 rallied
hard yesterday as Trump announced that he reached a “framework” of a
deal for Greenland and that he won’t go ahead with tariffs. This is the classic
TACO trade we’ve been all waiting
for.
Now that this risk is out
of the way, and barring new geopolitical escalations, we should have a clear
path to new all-time highs. The focus should now switch back to economic data
and the Fed.
Some hawkish repricing on strong US data could weigh on the market
in the short-term, but those will likely be dip-buying opportunities as long as
there’s no re-acceleration in inflation.
S&P 500
TECHNICAL ANALYSIS – DAILY TIMEFRAME
On
the daily chart, we can see that
the S&P 500 closed the Monday gap as
the market rallied hard after Trump’s de-escalation. There’s not much we can
glean from this timeframe, so we need to zoom in to see some more details.
S&P 500
TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On
the 4 hour chart, we can see that
we have a downward trendline defining the bearish momentum. We can expect the
sellers to lean on the trendline with a defined risk above it to keep pushing
into new lows. The buyers, on the other hand, will look for a break higher to
increase the bullish bets into new highs.
S&P 500 TECHNICAL
ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, we can
see that we have a minor support zone around the 6,945 level. This is where we
can expect the buyers to step in with a defined risk below the support to keep
pushing into new highs. The sellers, on the other hand, will look for a break
lower to extend the pullback into the next support around the 6,910 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 Flash PMIs.
This article was written by Giuseppe Dellamotta at investinglive.com.