Market Analytics and Considerations
Key Notes
The S&P 500 stagnates before the US CPI and FOMC.
- The Dow Jones remains stable at 33700, with bulls aiming for 34,000.
- The psychological support as well as resistance for the Nasdaq 100 remain at 11700.
Prior to the big week of economic data, fundamental risks increase
This week’s packed economic schedule will probably continue to affect volatility and perception for the rest of the year. The US CPI data and FOMC are two of the data points that are anticipated to be widely watched, with S&P 500, Dow Jones, and Nasdaq futures all posting minor increases.
Inflation and interest rates have continued to be the main drivers of price activity as major central banks get ready for their final policy meetings of 2022. Despite the fact that the Federal Reserve, Bank of England, and European Central Bank are still available, this week may be extremely difficult for stock indices.
US S&P 500 Technical Analysis for SPX
Early in the month, S&P 500 futures failed to break through the descending wedge formation’s trendline resistance, thus bears were able to control prices thanks to a rejection of the 4110 handle. Prices stayed under duress after breaking underneath the 200-day MA (moving average) at 4038 before petering out and at 3914.
A violation of the psychological level of 4000 might push upside potential toward wedge resistance at 4110 in order for the short-term advance to exit the current accumulation zone.
However, since the underlying environment is still significantly pushing on risk assets, the bearish movement may quicken if SPX 500 breaches nearby support at 3956. A price breach below 3880 could confirm the bearish move as the next area of support is formed around 3912.50.
Nasdaq
The Nasdaq 100, which is heavily weighted in technology, is unable to make any significant moves as long as the psychological level of 11700 remains as big barrier. While this area also serves as the midway mark of the 2020–2021 shift, resistance is held in place around 11785 by the 78.6% Fibonacci of the 2022 band. The 11500 psychological handle supports a move downward, slightly above the 50-day MA (moving average) at 11435, with the 11930 and 12000 levels forming additional hurdles above current levels.
Analysis of Dow Jones
Although Dow futures are now above 33700, a decline may send DJI back to its December bottom of 33452. The August bounce high at 34246 may be reached if prices continue to trade above the 34000 psychological resistance level.
