The market continues to hold positive sentiment as the latest economic data is interpreted as good news Alleviating the strength and price pressures in the labor market.
Fed Chairman Powell did not touch on monetary policy or the latest data set, allaying fears for the market and giving him more confidence to continue the rally.
We are at a crossroads.
On the one hand, there is the danger The market underestimated the Fed’s decision. And the impact on the economy.
On the other hand, the market is trading on the belief that the decline will be easy, and The federation reaches a soft landing.
Given the uncertainty, the technical can be a guide here.
S&P500 technical analysis
On the daily chart above, we can see that The price is now testing the main bottom trend line 2022 Bear Market Defined..
The price was stuck in a range during the Christmas holidays, but the NFP and ISM services PMI gave the market the boost it needed to break out of the range and converge towards the trendline.
The bulls need a clear upside to target the main target Objections In 4175 and 4324.
Another false breakout and fall below the 3900 level will give the bears the confidence to target the October 2022 low of 3506.
Looking at the 1-hour chart, We can see the latest indicators that have pushed the market higher.
The beat in NFP and the uncertainty in AHE and ISM services PMI, fueled the upward movement.
Once the market broke the resistance zone at 3920-3940, it pulled back, waiting for Fed Chairman Powell.
With that threat removed, the market started to rally again, targeting the blue trend line.
Zooming in to the 15-minute chart, We can see that the bulls are having a difficult time breaking up.
The price may consolidate here, waiting for another trigger.
The steps are described as follows:
- If the price stays above the 4022 level, the bulls will take control.
- It will be no man’s land if the price falls back into the range.
- If the price is below the 3962 level, the bears will regain control.