S&P 500 Technical Analysis

Yesterday, the S&P 500 ended the day around the
highs as the market continues to look through the beat in the US CPI report.
As previously mentioned, the path of least resistance looks to be to the upside
as long as growth remains pretty much stable, and the Fed doesn’t restart
tightening. In the first case, the labour market will need to keep on being
resilient, while in the second case, inflation should not start trending higher
so much that the Fed is forced to change course.

S&P 500 Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the S&P 500
yesterday ended the day near the cycle high. From a risk management
perspective, the buyers will have a better risk to reward setup around the trendline where we
can also find the red 21 moving average for confluence. The
sellers, on the other hand, will want to see the price breaking lower to position
for a drop into new lows.

S&P 500 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we
can also find the 50% Fibonacci
retracement level for extra confluence around the
trendline. The price has been diverging with
the MACD for a
long time. This is generally a sign of weakening momentum often followed by
pullbacks or reversals. In this case, it led to pullbacks into the red 21
moving average where the dip-buyers continue to pile in to position for new
highs. If we were to get another pullback, we can expect the same around the
moving average as long as the price doesn’t break below the trendline.

S&P 500 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we
have a “mini” range between the 5150 support and
the 5180 resistance. A break to the upside should lead to a rally into new
highs, while a break to the downside is likely to trigger a drop into the
trendline.

Upcoming Events

Today we get the US PPI, the US Retail Sales and the
US Jobless Claims figures. Tomorrow, we conclude the week with the University
of Michigan Consumer Sentiment survey.

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