Most of the US stock market indexes had a mixed Wednesday trading session as the market digested and dissected the FOMC meeting minutes, and the S&P500 index followed suit. The S&P 500 Futures (CME: ES) closed in the red for the 4th straight trading session on Wednesday as investors tried to price and adjust to the higher interest rates possibility.
Even though the futures price is up during the early hours of trading on Thursday, stronger-than-anticipated US inflation, labour market, manufacturing figures, and retail figures have left investors eyeing the worst week for the US market indexes.
Technical
The price action has been on a recovery upward trend after testing the major support level at the late hours of Wednesday’s trading session. The short rally follows a downward trend initiated by the break below the previous major support level (now major resistance level) earlier this week. The price action is currently trading below the 50-day moving average at 4023.50 and has firmly found resistance and support levels at the price level of 4056.25 and 3984.00, respectively.
If the bullish sentiment persists, a short-term opportunity could exist if the price action pushes above the 4019.00 price level, the initial level of significance for the bulls. After the price action breaches the 4019.00 resistance level, the possibility could also exist that the price could reach the 4025.00 price level as it moves towards the major resistance level at 4056.25.
If the bearish sentiment that has pushed the price action lower since its 2023 highs in early February continues, an opportunity could exist if the price action pushes below the support level of 4005, a level of significance for the bears. If the price action moves below the initial support level, it could push below the support level at 3998.00 as it moves towards the major support level at 3984.75.
Summary
With the highly anticipated Fed’s minutes released, the investors now have to factor in all the information and reprice the interest rates expectations. A short opportunity could exist if the price action moves below the support level at 4005.00 to the next support level at 3984.75. While a long opportunity could exist if the price action moves above the resistance level at 4019.00 to the next resistance level at 4025.00.
Sources: TradindView, KoyFin, Investor’s Business Daily.