The S&P 500 Index Futures (CME: ES) are trading flat on Friday as the bulls seemingly take a breather from the spectacular run which saw the index futures close four consecutive trading sessions of gains and on course to close the week over 2% higher.
The index futures are supported by positive market sentiment after data released earlier during the week revealed the smallest annual increase in US producer inflation in almost three years. This, combined with the report of minimal annual growth in consumer prices, reinforced the belief that inflationary pressures are subsiding, weighing on the US dollar and boosting the indices.
Tech-related shares provided the most support to the S&P 500, and an index of tech-focused shares, including mega caps FAANG, gained over 2.5% and registered a record high close, while US chip stocks, such as Nvidia, surged to record levels. Additionally, unexpected declines in weekly jobless claims showcased a tight labour market leaving the index futures higher as investors now turn their attention to the upcoming earnings season.
Technical
The 4-hour chart analysis indicates a current bullish momentum in the short-term, with the price trading above the 50- EMA. This suggests a potential trading opportunity as the price approaches the 4587.25 resistance level, with the next target for the bulls likely at the 4635.00 resistance level.
Immediate support for the price action can be expected at the 4491.75 level and the 50-EMA. If the bears gain control in the short term, a push below this level could trigger a selloff towards lower levels. The 4419.75 and 4329.50 support levels are likely to attract interest from the bears.
Summary
The index futures have enjoyed a significantly bullish session, and with the market firmly expecting the Fed’s monetary policy tightening cycle to come to an end soon, the bulls could hope the upcoming earnings season could help extend the current bullish run.
Sources: TradingView, Reuters, Seeking Alpha.
DISCLAIMER: This report has been prepared by Fairmarkets International (“The Company”). This document is not intended as an offer, solicitation or recommendation to buy or sell financial instruments or to make any investment. The Company has used reasonable efforts to obtain information from reliable sources and the report is provided without representation or warranty of any kind (neither expressed nor implied). The Company and Fairmarkets International disclaims liability for any publication not being complete, accurate, suitable and relevant for the recipient. Specifically, the Company and Fairmarkets International disclaims liability towards any user and other recipients of this report.