Technical Analysis

S&P500 (SPX) Price Analysis – Sep 15, 2023

By LonghornFX Technical Analysis
Sep 15, 20233 min

Daily Price Outlook

The global market sentiment remains positive as US equity markets head into the Friday closing session with significant gains. However, this reason for its upward trend can be attributed to the consistent positive US economic data, which shows that the US economy is doing better than expected. Investors are feeling positive and are no longer worried about an economic downturn in the US. They believe that the US economy is strong enough to handle challenges.

This can be witnessed by the positive performance of S&P 500, a key equity index. This renewed confidence is fueling the upward trajectory in the world's largest economy, instilling optimism in markets worldwide. It's worth noting that the S&P 500 made a strong move, reaching $4,500, thanks to positive US producer price index data that showed a 0.7% increase in August.

Positive US Economic Data and Outlook for Upcoming Reports

According to recent US economic data, the outlook is positive. For the week ending September 8, there were 220,000 new jobless claims, slightly better than the previous week's 217,000. In August, the Core Producer Price Index (PPI) rose by 2.2%, matching expectations and just below the previous 2.4% increase. Retail sales also improved, rising by 0.6% compared to the previous month's 0.5%, beating the expected 0.2% slowdown. These numbers suggest the US economy is in good shape, which can impact sentiment in the stock market and trading decisions.

Looking forward to Friday's economic calendar in the US, investors are hoping for more positive data. They are keeping an eye on consumer expectations, industrial production, and the NY Empire State manufacturing index. The initial reading of the Michigan Consumer Sentiment Index is expected to dip slightly from 69.5 to 69.1. Industrial Production for August is predicted to slow down significantly, dropping from 1% to just 0.1%. As for the NY Empire State Manufacturing Index, it's expected to improve but still stay in the negative zone, with a forecast of -10 compared to the previous -19. These upcoming numbers will be closely watched by the market.

Positive Economic News and Market Confidence Boost in China

Furthermore, the data from the National Bureau of Statistics (NBS) in China brings positive news. In the meantime, the recent decision by the People's Bank of China (PBoC) to cut the Reserve Requirement Ratio (RRR) by 25 basis points (bps) is boosting market confidence. China's Retail Sales (year-on-year) surged by 4.6% in August, surpassing the expected 3.0% increase and improving upon the previous month's 2.5% figure. Moreover, Industrial Production did even better, with a 4.5% growth rate in August, outperforming the estimated 3.7% rise seen in July. These numbers are certainly encouraging for the market.

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

S&P500 (SPX) - Technical Analysis

Upon scrutinizing the technical nuances of the S&P 500, the index displays volatility around the $4,500 mark. Delving into the four-hour chart, the S&P 500 has staged a comeback from a critical support pegged at $4,470. The candlestick configurations hint at a possible upward trajectory for the index.

Should the S&P 500 sustain above this threshold, it is poised to confront the ensuing formidable resistance near $4,500. Beyond this, another significant resistance coincides with the 61.8% retracement mark, intensified by a 61.8% extension.

On the flip side, if the S&P 500 descends below the $4,470 benchmark, ensuing supports are likely at $4,450 and $4,335. The linchpin remains the pivotal $4,400 support, serving as today's fulcrum. A position above this point insinuates a potential bullish continuation, whereas a breach below might signal augmented selling activity.



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