Stocks Slide into Support, PCE, Consumer Sentiment on Deck


Indices Talking Points:

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We’re winding right down to the top of the yr however volatility in shares has continued to movement. Today introduced a robust transfer to start out the session because the S&P 500 put in a useless drop from the important thing zone of resistance that got here into the image yesterday on the 3912-3928 space on the chart. This was resistance in late-October earlier than turning into assist over a few completely different episodes in November. Last week’s FOMC-fueled sell-off broke by way of that space because the S&P touched right down to the 3802-3810 zone that I had checked out over the weekend.

That assist stopped the bleeding, at the least quickly, with a doji printing on Tuesday adopted by appreciable energy yesterday. Price had paused at this key juncture of prior assist coming into this morning, however the GDP launch out of the US got here out to finish shock because the Q3 Final learn confirmed at 3.2% v/s the two.9% that was anticipated. This illustrates continued energy within the US financial system which comes together with the potential for continued-hawkishness from the FOMC, very like Powell had warned of final week when sellers began to get to work.

At this level, there’s yet one more massive batch of knowledge earlier than the vacation weekend and that’s tomorrow’s Core PCE launch, set to drop at 8:30 AM ET. There’s additionally a launch of Durable Goods orders on the identical time which can also be a high-impact launch, after which we get Consumer Sentiment numbers at 10 AM. This may make for a busy backdrop within the US Dollar and US equities, as properly.

At this level, the S&P 500 has put in one other sturdy bounce from assist within the 3802-3810 zone. This is a giant spot as there’s two Fibonacci ranges in shut proximity and maybe extra importantly, it’s proven impression, serving to to carry resistance in late-October and early-November earlier than serving to to set assist by way of a lot of final month.

So, on the very least, the battle strains are very outlined within the S&P 500 going into tomorrow. Resistance sits at 3912-3928 whereas assist is at 3802-3810. Below that assist 3750 and 3704, each of which had been higher-lows as worth was breaking out in November.

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S&P 500 Daily Price Chart

Chart ready by James Stanley; S&P 500 on Tradingview


For bearish themes the tech-heavy index continues to hold a bit extra attraction and, at this level, worth stays very near the 2022 swing lows which printed in a key zone. That zone runs from 10,501 as much as 10,751 and this helped to mark the lows in each October and November. If sellers could make a deeper push, this turns into an enormous take a look at but when they will sink worth by way of that, then there’s a giant spot on the 10k psychological stage, which can also be the 61.8% Fibonacci retracement of the 2018-2021 main transfer which, maybe sarcastically, spans the Fed’s final reducing cycle.

Nasdaq 100 Daily Price Chart


Chart ready by James Stanley; Nasdaq 100 on Tradingview


For bullish equity approaches, the Dow stays as extra engaging than the Nasdaq and maybe even the S&P 500. The Dow dropped to an enormous spot on the chart in the present day and this is identical spot that I had highlighted on within the weekly forecast, which got here into play on Tuesday. This is a swing-high from September that’s confluent with a bearish trendline projection. I’ve that plotted at 32,789 and it helped to carry the lows once more in the present day.

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Dow Daily Price Chart


Chart ready by James Stanley; Dow Jones on Tradingview

— Written by James Stanley

Contact and observe James on Twitter: @JStanleyFX

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