On the daily chart below, we can
see that the S&P 500 has gapped up at the futures open as McCarthy and
Biden announced a debt
ceiling deal over the weekend. This isn’t a surprise as the US
has always raised the debt ceiling eventually. Nonetheless, the market this
time may have been a bit more worried and the last week positive headlines on
the deal gave the S&P 500 a boost.
This may turn into a classic “buy
the rumour, sell the fact” trade and the technicals can help with that. The price
has closed the gap in overnight trading, and we will need to see another
failure to confirm that this may indeed be a “sell the fact” type of trade. If
this isn’t the case, then we should see the S&P 500 rallying all the way up
to the 4324 resistance.
S&P 500 Technical Analysis
In the 4
hour chart below, we can see that last Friday the S&P 500 rallied into the
weekend as we got positive headlines on the debt ceiling deal and the market
positioned for a possible deal over the weekend. This strong rally took out
also the previous high but got a bit overstretched, as depicted by the distance
from the blue 8 period moving
average. Generally, in such instances, the price consolidates or pulls back
before another push into the original direction.
In the 1
hour chart below, we can see that a possible pullback may bounce from the 4207
level where we can also find confluence with the 38.2% Fibonacci
retracement level and the red 21 period moving average. The
buyers are likely to lean on this level with defined risk just below it. The
sellers, on the other hand, will want to see the price to fall below the 4175
level to confirm the “sell the fact” trade and target the 4120 support first
and 4061 level next.
This article was written by ForexLive at www.forexlive.com.
http://dlvr.it/SppMpp
Comments
Post a Comment