S&P 500 Technical Analysis - Record highs back in sight

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S&P 500 Technical Analysis - Record highs back in sight

Fundamental
        Overview

The S&P 500 is slowly
    crawling back to the all-time high. The market continues to look forward to the
    next year with Trump's policies being a positive driver for growth.

The only bearish reason we
    had for the stock market was the rise in Treasury yields. That's generally
    bearish only when the Fed is tightening policy though not when yields rise on
    positive growth expectations.

Right now, the Fed's
    reaction function is that a strong economy would warrant an earlier pause in
    the easing cycle and not a tightening. That should still be supportive for the
    stock market in the bigger picture.

If the Fed's reaction
    function were to change to a potential tightening, then that will likely
    trigger a big correction in the stock market on expected economic slowdown. For
    now, the pullbacks look as something healthy and opportunities to buy the dips.

S&P 500
        Technical Analysis - Daily Timeframe

On the daily chart, we can
    see that the S&P 500 recovered all the losses and it's now back near the
    all-time high. The buyers will want to see the price breaking higher to
    increase the bullish bets into new highs. The sellers, on the other hand, will
    likely step in around these levels to position for a drop back into the major trendline
    around the 5900 level.

S&P 500 Technical
        Analysis - 4 hour Timeframe

On the 4 hour chart, we can
    see that we have another minor upward trendline defining the current bullish
    momentum. The buyers will likely keep on leaning on it to position for new
    highs, while the sellers will look for a break lower to increase the bearish
    bets into the major trendline.

S&P 500 Technical
        Analysis - 1 hour Timeframe

On the 1 hour chart, we can
    see that we are having a pretty slow and choppy price action these days due to
    the holidays. This could lead to fake breakouts due to the intraday noise. The
    sellers will want to see the price falling below the higher low around the 6017
    level to start targeting new lows, while the buyers will likely pile in around
    these levels to position for a rally into a new all-time high. The red lines
    define the average daily range for today.

                This article was written by Giuseppe Dellamotta at www.forexlive.com.

Source: S&P 500 Technical Analysis - Record highs back in sight

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