Fundamental Overview
The S&P 500 remains supported by the current US government shutdown as it keeps bearish risks away. In fact, the delay of key US data like the NFP is keeping monetary policy expectations steady and doesn’t give the Fed members much to work with.
As long as the Fed continues to cut interest rates and keeps a dovish reaction function, the stock market will remain skewed to the upside on steady growth expectations. What could trigger a bigger pullback is a hawkish repricing in the current interest rates expectations. That will require strong labour market data though, or clear inflation re-acceleration.
S&P 500 Technical Analysis – Daily Timeframe
On the daily chart, we can see that the S&P 500 is consolidating above the previous all-time high around the 6,756 level which is acting as support. The buyers will likely continue to step in around the support with a defined risk below it to keep targeting new highs. The sellers, on the other hand, will want to see the price breaking lower to target a pullback into the 6,611 level next.
S&P 500 Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that we have a minor upward trendline defining the bullish momentum which is also adding confluence to the 6,756 support. Again, this is where we can expect the buyers stepping in to keep targeting new highs, while the sellers will look for a break lower to target a drop into the 6,680 level.
S&P 500 Technical Analysis – 1 hour Timeframe
On the 1 hour chart, there’s not much else we can add here as the buyers will continue to lean on the support, while the sellers will wait for a break lower to pile in for new lows. The red lines define the average daily range for today.
Upcoming Catalysts
Today we have the FOMC meeting minutes. Tomorrow, we have Fed Chair Powell speaking and the US Jobless Claims report (if the shutdown is lifted). On Friday, we conclude the week with the University of Michigan Consumer Sentiment report.
