US indices took a hit yesterday as the market started to acknowledge that potentially quick policy tightening is coming. Comments from Fed members are increasingly hawkish, exerting strong pressure on stocks, especially the tech sector. However, Wall Street earnings season has begun and it may provide some relief for stocks. Big banks from the United States and other financial institutions are usually among the first to report and this time is no different. JPMorgan (JPM.US), Wells Fargo (WFC.US), Citigroup (C.US) and BlackRock (BLK.US) will report results today ahead of the Wall Street open and those reports may set moods for the remainder of the day. Release of the US retail sales report at 1:30 pm GMT may also impact sentiment on Wall Street today.
Taking a look at the S&P 500 futures chart (US500), we can see that the index failed to break above the 4,740 pts resistance zone and painted a double top in the area (orange circle). Subsequent pullback was halted in the 4,640 pts area and an attempt to launch a recovery move can be spotted at press time. Depending on how the day progresses there are 2 levels to watch - the aforementioned resistance at 4,740 pts and a support at 4,580 pts (lower limit of Overbalance structure).
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