Shares Slide into Assist, PCE, Shopper Sentiment on Deck

Indices Speaking Factors:

We’re winding right down to the tip of the yr however volatility in shares has continued to stream. As we speak introduced a robust transfer to start out the session because the S&P 500 put in a lifeless drop from the important thing zone of resistance that got here into the image yesterday on the 3912-3928 space on the chart. This was resistance in late-October earlier than changing into assist over a few completely different episodes in November. Final week’s FOMC-fueled sell-off broke by way of that space because the S&P touched right down to the 3802-3810 zone that I had checked out over the weekend.

That assist stopped the bleeding, at the least quickly, with a doji printing on Tuesday adopted by appreciable energy yesterday. Worth had paused at this key juncture of prior assist coming into this morning, however the GDP launch out of the US got here out to finish shock because the Q3 Remaining learn confirmed at 3.2% v/s the two.9% that was anticipated. This illustrates continued energy within the US financial system which comes together with the opportunity of continued-hawkishness from the FOMC, very like Powell had warned of final week when sellers began to get to work.

At this level, there’s another giant batch of knowledge earlier than the vacation weekend and that’s tomorrow’s Core PCE launch, set to drop at 8:30 AM ET. There’s additionally a launch of Sturdy Items orders on the identical time which can also be a high-impact launch, after which we get Shopper Sentiment numbers at 10 AM. This might make for a busy backdrop within the US Greenback and US equities, as properly.

At this level, the S&P 500 has put in one other robust bounce from assist within the 3802-3810 zone. This can be a massive spot as there’s two Fibonacci ranges in shut proximity and maybe extra importantly, it’s proven impression, serving to to carry resistance in late-October and early-November earlier than serving to to set assist by way of a lot of final month.

So, on the very least, the battle strains are very outlined within the S&P 500 going into tomorrow. Resistance sits at 3912-3928 whereas assist is at 3802-3810. Beneath that assist 3750 and 3704, each of which had been higher-lows as value was breaking out in November.

S&P 500 Day by day Worth Chart

Chart ready by James Stanley; S&P 500 on Tradingview

Nasdaq

For bearish themes the tech-heavy index continues to hold a bit extra attraction and, at this level, value stays very near the 2022 swing lows which printed in a key zone. That zone runs from 10,501 as much as 10,751 and this helped to mark the lows in each October and November. If sellers could make a deeper push, this turns into a large check but when they will sink value by way of that, then there’s a giant spot on the 10k psychological degree, which can also be the 61.8% Fibonacci retracement of the 2018-2021 main transfer which, maybe paradoxically, spans the Fed’s final slicing cycle.

Nasdaq 100 Day by day Worth Chart

Chart ready by James Stanley; Nasdaq 100 on Tradingview

Dow

For bullish fairness approaches, the Dow stays as extra engaging than the Nasdaq and even perhaps the S&P 500. The Dow dropped to an enormous spot on the chart in the present day and this is similar spot that I had highlighted on within the weekly forecast, which got here into play on Tuesday. This can be a swing-high from September that’s confluent with a bearish trendline projection. I’ve that plotted at 32,789 and it helped to carry the lows once more in the present day.

Dow Day by day Worth Chart

Chart ready by James Stanley; Dow Jones on Tradingview

— Written by James Stanley

Contact and observe James on Twitter: @JStanleyFX