S&P 500 Faces Uncertainty Amid Blockbuster Jobs Report, Chinese Balloon Incident
US500
-0.61%
Add to/Remove from Watchlist
Add to Watchlist
Add Position
Position added successfully to:
Please name your holdings portfolio
Type:
BUY
SELL
Date:
Amount:
Price
Point Value:
Leverage:
1:1
1:10
1:25
1:50
1:100
1:200
1:400
1:500
1:1000
Commission:
Create New Watchlist
Create
Create a new holdings portfolio
Add
Create
+ Add another position
Close
Movements of the S&P 500 since the Fed’s interest rate hike on Feb. 1 indicate that despite the late weekly selling, the index still managed to close last week with a 1.6% gain.
Thursday’s bumpy trading pushed the S&P 500 to 4195.49 before it then lost some gains; this was followed by a selling spree again on Friday from the day’s high at 4182.40, resulting in the formation of an exhaustion candle.
Friday’s monster jobs report added another blow to bulls, further accelerating a late-week selloff. While the U.S. economy was supposed to add 185,000 jobs, the report showed it added 517,000.
Monday, the S&P 500 could get a confirmation candle for this exhaustion candle, formed on Friday, if not hold the immediate support as it was trading below the significant support at 4141.83 after a weekly gap-down opening.
Undoubtedly, some analysts feel the further direction of the S&P 500 index still looks bullish, as the current selling spree could be a temporary phenomenon.
But I find the technical formations in the daily chart make it evident that this is not the case, and evolving geopolitical events could play a decisive role in defining the further direction for equity markets.
The balloon episode has already further strained tense relations, prompting Washington to cancel a planned visit over the weekend to Beijing by Secretary of State Antony Blinken.
This incident could lead to a surge in supply bans like we saw during the tariff trade war between the United States and China in 2018-19, which pushed the S&P 500 to hit a low at 2342 on Dec. 24, 2018.
S&P 500 Daily Chart
No doubt, if the S&P 500 does not hold significant support at 9 DMA, which is at 4086 in today’s session, bears could turn more aggressive and try to break the next support at 26 DMA soon.
In such a scenario, bearish sentiment could explode enough to push the S&P 500 to hit 200 DMA support, which is at 3948 this week.
