Wall St. to start near where it ended Friday
Fed and trade in focus this week
US500 Technical Overview
After a strong end to the past week, US indices are trading little changed ahead of their 1st cash session of the week with the major benchmarks set to begin not far from where they ended Friday. The economic calendar is light for the afternoon with no data releases of note and the FOMC in a blackout period ahead of their forthcoming rate decision on Wednesday (7PM GMT).
Trade is also expected to be a prominent theme in the coming sessions as we approach the deadline for additional US tariffs on China to be averted and any comments on this could cause some sharp market reactions.
Whichever way you look at it the US500 remains in an uptrend on the weekly chart with last week’s dip to the 10 EMA being keenly bought. An RSI reading of 67.5 is fairly high but still not that extreme and not suggestive of a market that is overstretched. Last week saw a hanging man candle form, but while this can be seen as a possible reversal signal it is not the strongest. Source: xStation
There may be a little more hope for those looking to short who follow the MACD on a daily chart, with a negative cross printed last week. This signal has preceded the last couple of declines but given the strong recovery into the end of the week bears may feel they have missed their chance. Source: xStation
The market has now recovered almost entirely the decline seen last week and moved back above the 78.6% fib level at 3139 which could now be seen as the initial support. Should price break below here then subsequent fibs at 61.8% (3124) and 38.2% (3103) could attract buyers. As for resistance the all-time high of 3158 is the first level to look for but if this is broken above then further gains are possible with the 127.8% fib at 3182 one to keep an eye on should it occur. Source: xStation