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
S&P 500 Daily
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
S&P 500 4 hour
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
S&P 500 1 hour
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.