Last week, the S&P 500 got under pressure amid geopolitical fears and a general risk off sentiment. The latest developments saw Israel retaliating against Iran but the latter downplaying the airstrikes. This episode might be behind our backs, although it’s worth to keep an eye on it if it were to become a concern again. On the macro side, the Fedspeak turned more hawkish, especially in the latter part of the week as the inflation progress looks to be stalled. Overall, the last week had plenty of bearish catalysts weighing on the market, so we will probably need some positive data on the inflation front this week to turn the sentiment around.
S&P 500 Technical Analysis – Daily Timeframe
On the daily chart, we can see that the S&P 500 continues to rollover with the trend now looking clearly bearish as the price keeps on printing lower lows and lower highs with the moving averages being crossed to the downside. The price has now reached another key support level at 4946. This is where we can expect the buyers to step in with a defined risk below the level to position for a rally into the new highs. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the next support at 4846.
S&P 500 Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that from a risk management perspective, the sellers will have a much better risk to reward setup around the previous support now turned resistance at 5057 where they will also find the confluence of the red 21 moving average and the 38.2% Fibonacci retracement level. The buyers, on the other hand, will want to see the price breaking above the resistance to invalidate the bearish setup and position for a rally into a new all-time high.
S&P 500 Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see that we have a minor black trendline defining the current downward momentum with the red 21 moving average acting as dynamic resistance. This is where we can expect the sellers to step in again if we get a pullback into the trendline to position for a break below the 4946 support. The buyers, on the other hand, will want to see the price breaking higher to pile in and target a rally into the 5057 resistance.
Upcoming Events
This week is a bit empty on the data front with just a few notable releases. We begin tomorrow with the US PMIs. On Thursday, we get the US Q1 GDP and the latest US Jobless Claims figures. On Friday, we conclude the week with the US PCE report.
