Technical Analysis

S&P500 (SPX) Price Analysis – May 3, 2024

By LonghornFX Technical Analysis
May 3, 20243 min

Daily Price Outlook

The S&P 500 Index has maintained its upward trend and remained well bid around 5,064.20, hitting the intra-day high of 5,073.21 level. However, this surge in the index can be attributed to several key factors contributing to the positive sentiment in the market.

One major reason behind the upbeat performance of the S&P 500 is the Federal Reserve Chair Jerome Powell's dovish remarks, indicating no immediate plans for further interest rate hikes, which have alleviated concerns among investors.

This dovish stance from the Fed has instilled confidence in the market, as it suggests a supportive monetary environment aimed at fostering economic growth.

Moreover, the prospect of potential interest rate cuts in the future has bolstered investor optimism. Powell's remarks have raised expectations for a rate cut by September, with market participants now pricing in a 61.3% probability of such a move.

This anticipation of accommodative monetary policy measures has fueled bullish sentiment and contributed to the upward trajectory of the S&P 500.

Additionally, positive developments in various sectors of the economy, including robust corporate earnings reports and encouraging economic indicators, have further buoyed the market sentiment.

US Economic Data and Federal Reserve's Comments: Impact on S&P 500

The S&P 500 Index has been closely influenced by recent US economic data releases and comments from the Federal Reserve, shaping investor sentiment and market dynamics. Following the Federal Reserve's decision to maintain interest rates steady and Jerome Powell's cautious remarks, the S&P 500 experienced a surge in positive momentum.

Powell's indication of no immediate plans for further rate hikes and the possibility of future rate cuts have been received positively by investors, driving the index higher.

Moreover, US economic data, such as the Nonfarm Payrolls (NFP) report and Initial Jobless Claims, have also impacted the S&P 500. The previously released upbeat job market data, including steady jobless claims and increased nonfarm productivity, have contributed to investor optimism and supported the upward trend of the index.

SPX Price Chart - Source: Tradingview
SPX Price Chart - Source: Tradingview

S&P500 (SPX) - Technical Analysis

The S&P 500 has demonstrated robust performance today, climbing by 0.91% to close at 5064.19, buoyed by favorable market sentiment and positive economic indicators. As the index approaches a significant technical juncture, traders are closely monitoring the key pivot point set at 5110.00.

The Relative Strength Index (RSI) remains neutral at 50, suggesting that the market is neither overbought nor oversold, offering room for movement in either direction. Moreover, the 50-Day Exponential Moving Average (EMA) stands at 5048.93, which the index has just surpassed, indicating potential for continued upward momentum.

Looking ahead, immediate resistance is seen at 5120.94. If the index surpasses this level, it could target further highs at 5166.08 and then at 5222.72. These levels are critical for traders looking for extended bullish signals.

Conversely, support lies at 5004.99. A break below this could see the S&P 500 testing further support at 4953.66 and potentially down to 4903.21, levels where buyers might step in to stabilize the index.

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