S&P 500 Technical Analysis | Forexlive

The S&P 500 ended last week on a positive note
as we got a strong rally despite some concerning data. The University of Michigan consumer
sentiment report missed forecasts across the board by a big margin once again.
The bearish signs keep on accumulating with the recent hawkish tone from Fed
speakers and the softening labour market data with the big misses in the recent
NFP report
and the rising Continuing Claims. The
buyers should be very careful going forward.

S&P 500 Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the S&P 500
last Friday rallied into weekend breaking above the strong resistance formed
by the previous swing high level and the 61.8% Fibonacci retracement level.
The price is now testing a key trendline and this
is where the sellers are likely to step in more aggressively with a tight risk
above the trendline to position for a drop into new lows with a great risk to
reward setup.

S&P 500 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see more closely the
price action around the key trendline and the resistance zone. If the sellers
manage to fade the Friday’s rally entirely, that will leave behind a fakeout,
which is a reversal pattern. The buyers will need the price to break above the
trendline to invalidate the bearish setup and increase the bullish bets into
the high at 4607.

S&P 500 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that the
price is diverging with
the MACD right
at the key trendline. This is generally a sign of weakening momentum often
followed by pullbacks or reversals. If we get a pullback, the buyers should
lean on the upward trendline, and the resistance turned support to position for
a breakout. The sellers, on the other hand, will want to see the price breaking
below the support and the trendline to confirm the reversal and position for a
drop into new lows.

Upcoming Events

This week we have some top tier economic releases. We
begin tomorrow with the US CPI report which is going to be one of the most
important events of the week. On Wednesday, we have the US Retail Sales and PPI
data, while on Thursday we conclude with the latest US Jobless Claims figures.

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