On the daily chart below for the S&P 500, we can see that the market has failed to break above the key 4175 resistance once again and it’s now thr
On the daily chart below for the S&P 500, we can
see that the market has failed to break above the key 4175 resistance once again and it’s now
threatening a deeper pullback. The break below the trendline suggests that the momentum has
switched to the downside.
Recently the buyers haven’t got
good news on the fundamental side as jobless claims started to rise and the
latest US Retail Sales missed across the board. Last Friday, the US
PMIs beat expectations though and, although it may be good news as the
economy might have not been hit by the banking crisis in March, the market
seems to be more worried about a persistently hawkish Fed as the details in the
report about inflation were not promising.
In the 4
hour chart below, we can see that the price has now broken below the trendline
and the moving
averages are pointing to the downside giving further confirmation of the bearish
momentum. The swing support at 4100 should be the target for the sellers if the
correction extends. The last bullish leg was also diverging with the MACD, so the 4100 level would also be
a natural target for the pullback.
In the 1
hour chart below, we can see that the price has also broken out of the range
that was created just below the key 4175 resistance level and it’s not
threatening a break of the Friday’s low. The sellers are likely to pile in on a
break and extend the fall to the 4100 support. The buyers, on the other hand,
may want to lean on this level to target the Friday’s high at 4160 awaiting new
economic data this week.
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