S&P 500 Technical Analysis | Forexlive

Last week, the S&P 500 surged to new highs
following the surprisingly dovish FOMC decision where
the Fed increased the rate cuts expected in 2024 to three and Fed Chair Powell
delivered some dovish comments. In the last part of the week, we got a slate of
soft-landing data as the US Jobless Claims and Retail Sales beat
expectations, while the US PMIs missed on the manufacturing side and beat on
the services one.

S&P 500 Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the S&P 500
last week broke above the cycle high and surged to new highs with the index now
being roughly 2% away from the all-time high. This rally from the end of
October has been really aggressive with very shallow pullbacks and it looks
more and more driven by FOMO. The buyers should be on the lookout for bearish
catalysts as those can trigger some nasty selloffs given the parabolic move of
the last two months.

S&P 500 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that from
a risk management perspective, the buyers would be better off to wait for a
pullback into the trendline where
they will find the confluence with
the 50% Fibonacci
retracement level and the red 21 moving average. The
sellers, on the other hand, will want to see the price breaking below the
trendline to pile in and position for a drop into the swing low at the 4540
level.

S&P 500 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see more
closely the consolidation that’s been going on since the day after the FOMC
decision. Some aggressive buyers might lean already on the red 21 moving
average to position for another rally. If the price breaks below the swing low
at 4693 though, we can expect the sellers to pile in to target a drop into the
trendline and upon a further break lower, extend the selloff into the 4540
level.

Upcoming Events

This week is a bit empty on the data front as we head
into the Christmas holidays. On Wednesday, we have the US Consumer Confidence
report. On Thursday, we get the latest US Jobless Claims data, while on Friday
we conclude the week with the US PCE report.