S&P 500 Technical Analysis | Forexlive

Yesterday, the S&P 500 had a negative day as
the US ADP data
missed expectations which might have weighed on the sentiment heading into the
NFP report tomorrow. There might also be a general profit taking ahead of the
NFP data and the FOMC rate decision next week as the market might want some new
strong catalyst to make new highs. In the bigger picture, the market generally
peaks when the labour market weakens, and the unemployment rate starts to rise
steadily, so the bulls should be very careful heading into the 2024.

S&P 500 Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the S&P 500
yesterday had a negative day as the sentiment might have deteriorated following
the miss in the US ADP data heading into the NFP release tomorrow. The sellers
continue to pile in around the cycle high targeting a bigger correction after
the insane November rally. From a risk to reward perspective, the buyers should
wait around the 4400 support where
they will also find the 38.2% Fibonacci retracement level
for confluence.

S&P 500 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that
the price has been diverging with
the MACDinto the cycle
high. This is generally a sign of weakening momentum often followed by
pullbacks or reversals. This was another signal for the buyers to be extra
careful around these levels as there was a high chance of a pullback. The 4540
level has been a good support recently with the buyers leaning on it to
position for another rally. Unfortunately, they failed to make a new high and a
break below the support is likely to trigger a selloff into the 4400 support
next.

S&P 500 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see more
closely the divergence with the MACD, which has been going on since the
breakout of the resistance at 4400. The buyers can try to lean on the 4540
level again to position for a rally, although the odds do not look good at the
moment. The next supports will be the 4490 level and the 4400 zone, which is
also going to be the last line of defence as a break below it will likely lead
to another bear market.

Upcoming Events

Today we get the latest US Jobless Claims figures
where the market will want to see how fast the US labour market is weakening.
Tomorrow, we conclude the week with the US NFP report which is going to be a
big market moving event.

See the video below