Technical Analysis

S&P500 (SPX) Price Analysis – Dec 08, 2023

By LonghornFX Technical Analysis
Dec 8, 20233 min

The global market sentiment has recently shifted towards a positive trajectory following a brief downturn. However, this upswing can be attributed to gains in the technology sector and heightened anticipation surrounding the upcoming jobs report, which is poised to significantly influence market expectations in the near future.

It is worth noting that the S&P 500 rose by 0.80% to 4,585.59, and the Dow added 62.95 points, or 0.17%, reaching 36,117.38. The Nasdaq Composite led the way with a 1.37% gain, closing at 14,339.99, driven by a robust performance from technology stocks. Throughout the week, the Nasdaq has consistently outperformed, posting a 0.2% gain, while the Dow and S&P 500 are expected to conclude the week slightly lower by around 0.4% and 0.2%, respectively.

Market Concerns Amidst Mixed Job Market Data

However, this upward momentum follows concerns about a potential slowdown in the late 2023 rally, as the Dow and S&P 500 experienced their first three-day negative streaks since October. Investor attention this week has been centered on the job market amid mixed data releases. Thursday's weekly jobless claims, which came in below economist expectations, and a decline in continuing jobless claims provided some relief.

Private payrolls data released on Wednesday showed fewer job additions than anticipated, and October's job openings reached their lowest point since March 2021. The anticipation for Friday's official jobs report has intensified, with economists expecting the addition of 190,000 jobs in November. Investors are closely monitoring for signs of a slowing labor market, which would align with the Federal Reserve's decision to pause interest rate hikes.

Therefore, the disappointing job data and low job openings in October, combined with the heightened anticipation for the official jobs report, are impacting global market sentiment as investors closely watch for signs of a potential slowdown in the labor market, aligning with the Federal Reserve's cautious approach on interest rate hikes.

S&P500 (SPX) Price Chart – Source: Tradingview
S&P500 (SPX) Price Chart – Source: Tradingview

 S&P500 (SPX) - Technical Analysis

The S&P 500 remains a barometer for investor sentiment and economic expectations. On December 8th, the index exhibited a minor uptick in value, nudging up by a mere 0.05% to anchor at 4585.58. The market’s subtle shift in momentum is reflected in the chart's resistance levels, which lie at $4606 and extend upwards to $4694, with the ultimate test being the $4765 mark.

The index’s pivot point, the threshold between bullish and bearish sentiment, stands firm at $4585. Key support levels are drawn at $4491, $4425, and the more distant $4351, ready to offer a safety net should the index falter.

Technical indicators provide mixed signals. The Relative Strength Index (RSI) hovers around 65, indicating a market that is neither overextended nor retreating, suggesting a potential for further gains without immediate concern for a reversal.

Importantly, the 50-day Exponential Moving Average (EMA), not specified but typically a gauge for trend direction, could further inform the short-term market trajectory.

Market patterns reveal a range-bound behavior, with a clear resistance ceiling in sight. The implication here is that the S&P 500 is testing the waters, potentially gearing up for a decisive movement that could set the tone for the year-end market performance.

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