Technical Analysis

S&P500 (SPX) Price Analysis – March 9, 2023

By LonghornFX Technical Analysis
Mar 9, 20233 min

Daily Price Outlook

The S&P500  is trading at 3,992.01, up 0.14% in the last 24 hours. The index gained ground as investors struggled to make sense of mixed statements made by Federal Reserve Chair Jerome Powell and US economic data ahead of upcoming labor and inflation reports.

The upcoming data is anticipated to influence the central bank's rate hike plan.

US Economy and Fed Rate Hikes

On his second day of testimony before Congress on Wednesday, Powell reiterated his message of potentially higher and quicker interest rate increases, which he had already stated on Tuesday. However, he hinted that the decision on the next rate hike would depend on the data released prior to the Fed's March meeting.

In addition, data released on Wednesday showed that US private payrolls rose more than expected in February, but this did little to ease concerns about the potential for higher interest rates.

Another report indicated that US JOLTS Job Openings decreased in January, but less than anticipated. Despite the decrease, the data suggested that the labor market remained tight, with job openings falling to 10.82 million. This has raised concerns that the Fed may continue its plan to raise interest rates for an extended period.

Traders continued to increase their bets on a 50 basis point interest rate hike by the US central bank later this month. CME Group's FedWatch tool indicated a nearly 80% chance of such a rise, up from roughly 70% on Tuesday.

The dollar remained stable for the day but fell from its three-month highs as Federal Reserve Chairman Jerome Powell provided no new insights during his second day of congressional testimony. The DXY dropped to 105.57 as investors awaited Friday's employment data. Meanwhile, the US 10-Year Treasury Yield increased to 3.997%.

S&P Sectors

Six out of the 11 major sectors of the S&P were down, with energy showing the largest decline at 1.3%. On the other hand, real estate saw the highest increase, rising by 0.96%.

Despite a general market downturn, airline stocks survived after the Justice Department filed a lawsuit to halt JetBlue's acquisition of Spirit Airlines. United Airlines saw a 3% increase, while American and Delta had gains of 1.5% and 1.6%, respectively.

Occidental Petroleum Corp. saw a 1.8% increase after Warren Buffett's Berkshire Hathaway Inc. raised its ownership to approximately 22.2% in the oil company.

However, Tesla Inc. fell by 3.3% after the U.S. auto safety agency announced a preliminary inquiry on 120,000 Model Y 2023 vehicles due to reports of steering wheels coming off while driving.

 S&P500 Price Chart - Source: Tradingview

S&P500 Intraday Technical Levels

Support      Resistance

3961            4031

3936            4075

3891            4101

Pivot Point: 4006

S&P500 – Technical Outlook

The S&P 500 (SPX) has faced resistance near the $4,060 level, which is extended by a 50% Fibonacci retracement mark, causing the index to drop again from a technical perspective. Candles closing below this level are keeping SPX in a sell zone, and the "three black crows" pattern in the 4-hour timeframe adds to the bearish bias among investors.

The SPX's immediate resistance level is $4,095, supported by a 61.8% Fibonacci correction level on the upside. A bullish breakout above the $4,035 level may lead to further gains toward the $4,200 mark. However, in the event of a breakdown below the support level of $3,930, the SPX may drop toward the next support level at $3,880.



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