S&P500 (SPX) Price Analysis – Nov 29, 2024
Daily Price Outlook
The global market sentiment has been flashing red, as seen in the bearish performance of the S&P 500 index, which hit an intra-day low of 5,984.
The primary reason behind its downward trend can be attributed to a combination of geopolitical risks, economic uncertainties, and the Federal Reserve's cautious stance on interest rate cuts.
Geopolitical Tensions Weighing on Investor Confidence
However, one of the key factors influencing the bearish trend of the S&P 500 index is the ongoing Russia-Ukraine war. The prolonged conflict has led to rising uncertainty in the market, with investors fleeing to safe-haven assets like gold.
However, the recent developments, such as Russia's warning of potential hypersonic missile strikes on Ukraine, have added to the already tense situation, amplifying investor concerns.
These geopolitical risks are pressuring global equity markets, including the S&P 500, as investors become more cautious amid the potential for further escalation.
In addition, US President-elect Donald Trump's policies are raising concerns, particularly his stance on trade.
The announcement of increased tariffs on Chinese goods has heightened fears of a trade war, which could dampen global economic growth and affect corporate earnings.
The S&P 500, heavily influenced by global trade dynamics, is especially vulnerable to such risks, contributing to its downward movement.
Uncertainty Over Fed’s Rate Cuts Contributes to S&P 500 Weakness and Market Instability
On the domestic side, the Federal Reserve's careful approach to cutting interest rates has contributed to the S&P 500's weak performance.
Despite robust consumer spending and economic growth, the latest data from the US Personal Consumption Expenditures (PCE) Index shows little progress in reducing inflation.
This has led to uncertainty over the Fed’s next move, with market participants unsure about whether the central bank will cut rates in the coming months.
The minutes from the November Federal Open Market Committee (FOMC) meeting showed that Fed officials have different opinions on how much to cut rates in the future.
Some are worried about inflation staying high, while others are hopeful that the Fed can reach its target.
This confusion about the Fed’s next steps has caused market instability, with investors uncertain about the economy in 2025.
S&P 500 – Technical Analysis
The S&P 500 Index (SPX) is trading at $5,998.73, down 0.38%, as bearish momentum intensifies following a break below the $6,015 pivot point. Immediate support lies at $5,965, with deeper cushions at $5,923 and $5,887.
These levels are critical for traders monitoring potential downside risks. The 50-day EMA at $5,954.14 aligns closely with the next support zone, reinforcing its significance.
On the upside, immediate resistance is marked at $6,055, with higher targets at $6,085 and $6,120. A move above $6,055 is necessary to shift sentiment and reestablish bullish momentum.
The RSI stands at 60, reflecting moderately bullish conditions despite the recent dip, but sustained selling pressure could drive the index toward oversold levels.
The broader trend suggests a cautious outlook as SPX remains under its pivot. A sell entry below $6,014 with a target of $5,964 aligns with current technical patterns, while a stop-loss above $6,053 ensures risk management.
Traders should watch for a break of $6,015 to confirm further bearish moves or a recovery above this level for potential reversals.
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