Fundamental
Overview
The S&P 500 recovered all
the losses as the de-escalation that ensued soon after Trump’s threat of
massively increasing tariffs on China gave the bulls a good reason to keep
piling into the market.
The baseline expectation is
for US and China to reach some kind of a deal before the November 1st
deadline. If that doesn’t happen, then we can expect the deadline to be
postponed keeping the negotiations going.
Everybody knows that 155%
tariffs on China would be a suicide for both, so it’s kind of an empty threat.
Nevertheless, we could still see the markets selling off in case things go
south and Trump decides to impose those tariffs. It’s a very low risk, but still
a risk.
On Friday, the BLS will
release the US CPI report despite the shutdown since it’s crucial for social security
benefits adjustment required by November. The data won’t stop the Fed from
cutting rates in October, but it could trigger a hawkish repricing in case we
get an upside surprise.
S&P 500
Technical Analysis – Daily Timeframe
On
the daily chart, we can see that
the S&P 500 bounced around the major trendline a couple of times and
eventually rallied back into the recent highs. We
can expect the sellers to step in around these levels with a defined risk above
the all-time high to position for a drop back into the trendline. The buyers,
on the other hand, will want to see the price breaking higher to increase the
bullish bets into the 7,000 level next.
S&P 500 Technical
Analysis – 4 hour Timeframe
On
the 4 hour chart, we can see that
we have a key support zone around the 6,760 level where the price got rejected
from several times in the past weeks. We can expect the buyers to continue to
lean on that support with a defined risk below it to keep pushing into new
highs, while the sellers will look for a break lower to target a pullback into
the major trendline.
S&P 500 Technical
Analysis – 1 hour Timeframe
On the 1 hour chart, there’s
not much else we can add here as the buyers would be better off stepping in
around the support, while the sellers should wait for a downside breakout
