FundamentalOverview
We got some very good news last week as both the CPI and PPI came in on the softerside. This should support the stock market in the bigger picture as it willgive the Fed more confidence to start cutting rates at some point in the lastpart of the year.
The FOMC decision last week turned out to be a bit more hawkish than expected but Fed Chair Powell made it clear that theirforecasts can change as they remain very data dependent, so the market lookedpast the Fed’s projections.
The risk sentiment is still a bit murky, but it looks like the negativemood from the last week is starting to dissipate. We have the US Retail Sales datatoday where positive figures should give the market a boost and support therisk sentiment.
S&P 500Technical Analysis – Daily Timeframe
On the daily chart, we cansee that the S&P 500 keeps making all-time highs despite other risk assetsfinding it harder to rally. We got a strong push to the upside yesterdaywithout any catalyst as the path of least resistance remains to the upside.
From a risk managementperspective, the buyers will have a better risk to reward setup around the trendline where they will also find the confluenceof the previous all-time high and the 61.8% Fibonacciretracement level. At the moment though, it’s unlikely that we will seesuch a big pullback unless we get some really ugly US data.
S&P 500 TechnicalAnalysis – 4 hour Timeframe
On the 4 hour chart, we cansee that we have a good supportzone around the 5450 level where we can find the confluence of a minortrendline and the 38.2% Fibonacci retracement level. If the price gets there, wecan expect the buyers to lean on the trendline with a defined risk below it toposition for another rally with a better risk to reward setup. The sellers, onthe other hand, will want to see the price breaking lower to increase thebearish bets into the next trendline around the 5350 level.
S&P 500 TechnicalAnalysis – 1 hour Timeframe
On the 1 hour chart, we cansee that we have another minor support around the 5510 level. If we get a dipinto it on weak US Retail Sales data, the buyers might step in around there tofade the reaction and position for new highs. The sellers, on the other hand,will want to see a break to increase the bearish bets into the trendline aroundthe 5450 level. The red lines define the average daily range for today.
UpcomingCatalysts
Today we have the US Retail Sales and US Industrial Production. On Thursday,we get the US Housing Starts, Building Permits data and the latest US JoblessClaims figures. On Friday, we conclude the week with the and US PMIs.
