The tensions in the Middle East have risen on late Tuesday as a rocket hit a hospital in Gaza killing hundreds of people and sparking a global outrage. As a consequence, Jordan cancelled the summit that was scheduled between the US President Biden, the Palestinian President Abbas and the Egyptian President al-Sisi in Amman.
On a domestic side, the strong US Retail Sales data was followed by a rally in Treasury yields with the 10yr approaching 5.00%. This tightening in financial conditions might be weighing on the stock market, especially in this part of the cycle when the past rate hikes should start to feed through the economy faster.
S&P 500 Technical Analysis – Daily Timeframe
On the daily chart, we can see that the S&P 500 is consolidating around the key 4331 level with the recent fall below the level being an ominous sign for the buyers. If we see a continuation of the selloff and the price breaks out of the rising channel, the sellers should get much more conviction and target not only the 4194 level but also a break below it.
S&P 500 Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price yesterday broke through the key 4331 level where we had also the red 21 moving average and the 38.2% Fibonacci retracement level for confluence. The buyers should step in today and try to get back above the level to target the top trendline, otherwise the sellers will have more control and look for a drop into the 4194 level.
S&P 500 Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the key level and the little bounce yesterday into the close. Although there isn’t much to lean onto at the moment, if the price stays below the 4331 level the bias remains bearish, on the other hand, if the price rises back above the 4331 level the bias will turn bullish again.
Upcoming Events
Today we will get the latest US Jobless Claims data and it will be interesting to see if the miss in Continuing Claims last week was just a blip or the start of a trend. Later in the day we will also hear from Fed Chair Powell where the market will be focused on any hint about the near-term policy outlook.
