S&P500 (SPX) Price Analysis – Sep 22, 2023

Daily Price Outlook

The global market is currently showing mixed sentiment with a hint of caution. Asian markets, in particular, are displaying this mixed sentiment with a slightly negative bias. This caution is primarily due to concerns about the US Federal Reserve's recent hawkish stance on interest rate increases. Investors are carefully watching how this might affect the overall trajectory of interest rates, which is contributing to the uncertainty and mixed feelings in the markets.

Market Sentiment Impacted by Federal Reserve's Hawkish Stance and Strong USD

It's important to note that the broad-based US Dollar remains strong due to the Federal Reserve's hawkish stance. They have maintained high interest rates, hinting at a potential hike this year and fewer rate cuts in 2024. This has pushed US Treasury bond yields, affecting the market sentiment. Also, an unexpected drop in US weekly jobless claims added to the momentum. However, the Fed's plan to maintain higher rates for an extended duration raises worries regarding its potential impact on the economy.

The news has underminned market sentiment, as investors are concerned about the economic effects of the Federal Reserve's commitment to keeping interest rates high for an extended period.

Global Market Snapshot and Potential Impact on S&P 500

China's SSE Composite Index is up by 0.68% to 3,105, and Shenzhen Component Index has risen by 1.02% to 10,083. Hong Kong's Hang Seng Index is at 17,846, showing an increase. However, Tokyo's Nikkei 225 is down by 0.42% at 32,433, and South Korea's Kospi is down by 0.30%. Taiwan's Weighted Index has improved by 0.21%.

In Australia, the ASX 200 is down by 0.14% due to low commodity prices affecting the mining sector. Japan's Nikkei 225 index initially dropped after the Bank of Japan's decision to maintain its dovish monetary policy, disappointing investors anticipating hawkish signals.

In India, the Nifty 50 index has advanced to 19,761, showing a gain of 0.10%. However, caution persists due to rising tensions in the diplomatic dispute between India and Canada, linked to allegations surrounding a Sikh secessionist leader's killing.

Hence, the positive trends in China's and Hong Kong's markets may bolster global sentiment, potentially impacting the S&P 500 positively. Conversely, Japan and South Korea's downturns, along with caution in India, might introduce a hint of uncertainty.

S&P500 (SPX) - Technical Analysis

The prominent stock market index, the S&P 500, is displaying a pronounced bearish trend, declining by nearly 3% to stand at $4,336. This level serves as a pivotal support, underscored by a double bottom pattern at the same mark.

On the daily chart, the SPX has manifested two significant bearish engulfing candles, indicating a dominant bearish sentiment. Should the SPX breach the $4,336 threshold, it is poised to encounter subsequent support levels at $4,295 and possibly $4,261.

Conversely, the resistance is anchored at $4,377. A surge above this level could pave the way for the SPX to approach $4,440.