Uncertainty spreads among investors as they await more data

In the aftermath of the latest Federal Reserve (FED) meeting and subsequent 25 basis points rate hike, SPX has been experiencing fluctuating price action, oscillating primarily between $4,520 and $4,600. This range-bound activity could indicate investors’ caution as they grapple with the implications of the FED's policy changes and monitor the incoming economic data to ascertain the overall market direction. Today, we will get an update on S&P Global Manufacturing PMI, ISM Manufacturing PMI, ISM Manufacturing Employment, and JOLTs Job Openings (note that we are not listing every data release, only ones important to us). On Thursday, we will get more information on initial jobless claims, S&P Global Services PMI, S&P Global Composite PMI, and ISM Services PMI. Then finally, on Friday, the unemployment rate and non-farm payrolls are scheduled to come out. We will wait for these figures and reassess our views accordingly.

Illustration 1.01
The picture above shows the daily chart of SPX. Yellow arrows indicate the divergence between the price and technical indicators MACD and RSI; in addition to that, on the MACD’s graph, the signal line can be seen breaking above the MACD line, which is slightly bearish (but it could still be only a fakeout). Therefore, we will monitor these two indicators in the following days for any signs of a potential trend reversal.

Technical analysis gauge
Daily time frame = Bullish
Weekly time frame = Bullish
*The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of RSI, MACD, Stochastic, DM+-, ADX, and moving averages.

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DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.