On the below daily chart for the S&P 500, we can see that the price action is still range bound below 4175. This has been a really strong resistance and we can expect some quick rally once the price breaks decisively with buyers jumping in aggressively and sellers quickly settling in.
In general, the market hasn’t done much since April as we have been bouncing up and down between the 4175 resistance and the 4061 support. This is the type of market that cuts a lot of impatient traders out. For now, it’s a waiting game until we get a clear hack backed by a primary catalyst.
In the 4 hours chart below, we can see that we have a narrower range between the 4175 resistance and 4120 support. These pressures generally lead to big moves once the market breaks out. Yesterday’s big rally was due to positive news on the debt ceiling front, but it is more likely that in the event of a deal we get a “sell the truth” reaction rather than a rally. The risk events to watch next are the US jobless claims today and Fed Chair Powell’s speech tomorrow.
On the hourly chart below, we can see very closely the narrow range we have been stuck in since the beginning of May. A break above 4175 would trigger a quick rush to the top of 4206. This would be the sellers’ last line of defense as a break beyond that would lead to more upside in the 4300 area. On the downside, sellers may again rely on 4175 resistance and target support 4120 first, and 4061 support after that. Watch these levels closely.