Fundamental Overview
The S&P 500 remains supported by the current US government shutdown as it wards off downside risks. In fact, the delay in key US data like the PFNP keeps monetary policy expectations stable and doesn’t give Fed members much.
As long as the Fed continues to cut interest rates and maintains a dominant reaction function, the stock market will remain biased toward the upside of expectations for steady growth. What could trigger a larger pullback is a hawkish fix in current interest rate expectations. This will, however, require strong labor market data, or a clear re-acceleration of inflation.
S&P 500 Technical Analysis – Daily Time Frame
S&P 500 daily
On the daily chart, we can see that the S&P 500 is consolidating above the previous all-time level around the 6,756 level which acts as support. Buyers will likely continue to step into support with defined risk below to continue targeting new highs. Sellers, on the other hand, will want to see the price decline to target a pullback into the next 6,611 level.
S&P 500 technical analysis – 4 hours
S&P 500 4 hours
On the 4-hour chart we can see that we have a minor ascending trendline defining the bullish momentum which also adds confluence to support at 6,756. Again, this is where we can expect buyers to step in to continue targeting new highs, while sellers will look for a break lower to target a drop in the 6,680 level.
S&P 500 technical analysis – 1 hour
S&P 500 1 hour
On the 1-hour chart, there is not much else we can add here as buyers will continue to rely on support, while sellers will wait for a break lower to stack for new lows. The red lines define the average daily range for today.
Upcoming catalysts
Today we have the minutes of the FOMC meeting. Tomorrow we feed Chairman Powell Powell and the US Unemployment Claims Report (if the shutdown is lifted). On Friday, we wrap up the week with the University of Michigan Consumer Sentiments Report.
