Technical Analysis

S&P500 (SPX) Price Analysis – February 27, 2023

By LonghornFX Technical Analysis
Feb 27, 20233 min

Daily Price Outlook

The S&P500 stock market index is currently trading at $3,970.04, down 1.05% in the last 24 hours. Investors are becoming increasingly worried about the potential for aggressive interest rate hikes, which has contributed to the recent downward trend. Despite a series of positive economic data, the S&P 500 has experienced a 2.7% drop for the week.

Fed to Raise Interest Rates

Recent economic data has led to predictions that the Federal Reserve may need to keep interest rates higher for an extended period to achieve its 2 percent inflation target.

On February 24, the latest inflation measure, core monthly personal consumption expenditures, showed a higher-than-expected increase in prices, rising 0.6% month-on-month and 4.7% year-on-year. This news has caused American stocks to fall for three consecutive weeks, following a strong start to the year.

The S&P is also declining due to the Fed's indication that it may raise rates in the long term, with inflation being a primary concern.

Geopolitical Concerns and SPX: How Global Tensions Affect the S&P 500

The Chinese government proposed a 12-point plan aimed at ending the war between Ukraine and Russia. The plan includes a call for a ceasefire and a gradual de-escalation of the situation to pave the way for peace negotiations.

China's foreign ministry announced the proposal on February 24, which coincides with the one-year anniversary of Russia's invasion of Ukraine. The plan also includes lifting Western sanctions against Russia, creating humanitarian corridors to evacuate civilians, and ensuring grain exports after disruptions caused a surge in global food prices last year.

Despite the proposal, leaders from Germany and the European Union criticized China's plan, citing geopolitical concerns that had a negative impact on market sentiment. The S&P 500 also declined due to the rising geopolitical tensions.

Upcoming Corporate Earnings: What to Expect from Key Companies

Investors will be monitoring a range of economic data reports and corporate earnings in the upcoming week. Some notable companies scheduled to release their earnings this week include Target (NYSE:TGT), Costco (NASDAQ:COST), Lowe's (NYSE:LOW), and Macy's (NYSE:M).

In addition, the durable goods orders report is expected on February 27.

While only 6% of the S&P 500 will be reporting earnings, investors will be paying close attention to data from large retailers, which will provide important insights into the state of consumer spending and the impact of inflation on businesses and consumers.

 S&P500 Price Chart - Source: Tradingview

S&P500 Intraday Technical Levels

Support      Resistance

3978.24       4037.35

3944.16      4062.38

3919.13      4096.46

Pivot Point: 4003.27

S&P500 – Technical Outlook

Technically speaking, the S&P 500 (SPX) is in a bearish trading pattern and has fallen to $3,990. It recently broke an upward channel at $4,100, which has contributed to the current downtrend.

The SPX's current support level is at $3,950, backed by a double-bottom pattern. However, if the support level is breached, the S&P 500 may decline further, possibly to $3,885.

On the flip side, the S&P 500's resistance level stands at $4,000 or $4,075. Today's release of the US Preliminary GDP is highly anticipated and could significantly impact the pricing of the US stock markets.

At 1:30 pm, the release of USD Core Durable Goods Orders m/m is expected to show a 0.1% increase, while USD Durable Goods Orders m/m may experience a 3.7% decrease. At 3:00 pm, USD Pending Home Sales m/m is anticipated to grow by 0.9%. These releases have the potential to significantly affect the pricing of US stock markets today.


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