S&P500 (SPX) Price Analysis – Sep 29, 2023

Daily Price Outlook

The global markets have been gaining momentum and rebounded on Friday, signaling a recovery for major US indices. The S&P 500, a key US stock gauge, turned around on Friday, gaining nearly 0.60% and settling just below $4,300. Although, this was a relief after a more than 5.0% drop from its September peak of around $4,540. Other major indices followed suit, with the Dow Jones Industrial Average (DJIA) rising 116 points to $33,666.34 (0.35%), and the tech-heavy Nasdaq Composite surging over 0.80% to $13,201.28.

As we all are well aware, the month of September has been challenging for stocks due to recession and government shutdown concerns, but the pause in selling and Treasury yield hikes allowed for this rebound, ahead of the critical US Personal Consumption Expenditure (PCE) Price Index release on Friday.

US Dollar Strength and Federal Reserve Focus

Investors are keeping a close eye on the strength of the US Dollar (USD). Despite lackluster US economic data on Thursday, their primary focus is on the Federal Reserve's efforts to support the USD. Just last week, the central bank cautioned that ongoing inflation in the US could lead to another interest rate hike before the year's end. This highlights the significance of the upcoming US Core PCE Price Index release. It will shape market expectations about the Fed's future actions, influencing demand for the USD and giving new impetus to various currency pairs.

Upcoming US PCE Inflation Measure and Market Expectations

Looking forward, the focus is on the upcoming US PCE inflation measure, expected to hold steady at 0.2% for August. This data is critical as it helps shape market expectations regarding the Federal Reserve's future moves. The Fed is keenly watching inflation, and its actions can impact the value of the US Dollar (USD) and, in turn, influence the broader financial markets.

S&P500 (SPX) - Technical Analysis

When conducting a technical analysis of the S&P500 for September 29, it's crucial to consider several key factors. The chart timeframe under scrutiny is 4 hours, with the pivot point being established at $4365.

In terms of resistance, there are three primary levels to observe: immediate resistance at $4420, followed by the next resistances at $4519 and $4569.

Conversely, support levels are delineated at $4269, with subsequent support points at $4217 and $4122. Analyzing technical indicators provides deeper insights.

The Relative Strength Index (RSI) currently stands at 43, which hints at a slightly bearish sentiment since an RSI value below 50 typically signifies a bearish market stance.

In the MACD readings, a value of 7 and a signal of -26 were recorded. Interestingly, the MACD line's position above its signal line suggests potential bullish momentum.

The 50-day Exponential Moving Average (50 EMA) is at $4360, and since the price is marginally above this point, a short-term bullish trend can be inferred. Chart patterns further reveal a Fibonacci Retracement, with the 38.2% level pinpointed at $4325.

This level's breach, in either direction, could offer clues about the asset's forthcoming trajectory.

In the short term, it's anticipated that the S&P500 will endeavor to test the resistance stationed at $4420.