FUNDAMENTAL OVERVIEW
The S&P 500 broke through a key support on Friday and extended the losses into new lows as traders hedged into the weekend risk. Those hedges are being unwound today given that nothing happened over the weekend.
The focus remains solely on the US-Iran negotiations and there’s some cautious optimism as Pakistan confirmed that negotiations may take place in Islamabad in the coming days and Trump said that they are performing extremely well and they could make a deal pretty soon, although he added that they might fail as well.
The path of least resistance remains to the downside until we get a resolution. Traders will keep a watchful eye on the headlines and especially on Trump’s Truth Social account, as we are always one post away from huge market moves.
Trump's ceasefire expires on April 6, so there's a chance we get a deal before that as failure to reach one would increase substantially recession risks.
S&P 500 TECHNICAL ANALYSIS – DAILY TIMEFRAME
On the daily chart, we can see that the S&P 500 broke through the key support around the 6,525 level again on Friday and eventually extended the losses into the 6,363 level before bouncing. From a risk management perspective, the sellers will have a better risk to reward setup around the broken support turned resistance to position for new lows. The buyers, on the other hand, will want to see the price breaking higher to extend the pullback into the major trendline.
S&P 500 TECHNICAL ANALYSIS – 4 HOUR TIMEFRAME
On the 4 hour chart, we have a minor downward trendline defining the bearish momentum. The sellers will likely lean on the trendline with a defined risk above it to keep pushing into new lows, while the buyers will look for a break to extend the pullback into the 6,525 resistance.
S&P 500 TECHNICAL ANALYSIS – 1 HOUR TIMEFRAME
On the 1 hour chart, there’s not much we can add here as the sellers will look for a rejection around the trendline, while the buyers will look for a break. The red lines define average daily range for today.
UPCOMING CATALYSTS
Today we have Fed Chair Powell speaking. Tomorrow, we get the US Consumer Confidence and US Job Openings data. On Wednesday, we have the US ADP, the US Retail Sales and the US ISM Manufacturing PMI. On Thursday, we get the latest US Jobless Claims figures. On Friday, we conclude the week with the US NFP report.
