The S&P 500 this week held into last week's gains as the lack of economic releases and the Thanksgiving Day holiday contributed to a steady risk sentiment. On the data front, the US Jobless Claims on Wednesday beat expectations across the board, which is a good thing for the market at the moment given some recession fears, although one beat after a series of misses doesn’t change the trend. Today, all eyes will be on the US PMIs, but given the early closure for Black Friday we might not see much movement, unless the data surprises.
S&P 500 Technical Analysis – Daily Timeframe
On the daily chart, we can see that the S&P 500 broke through the swing high at 4543 as this week didn’t provide any bearish catalysts. The price is now approaching the cycle high at 4607 and we can expect some profit taking around these levels, which would finally provide a decent pullback.
S&P 500 Technical Analysis – 4 hour Timeframe
On the 4 hour chart, we can see that the price is diverging with the MACD, which is generally a sign of weakening momentum often followed by pullbacks or reversals. This might be another hint that we could see a pullback very soon, so the buyers should decrease the risk, especially since this rally looks to be based more on FOMO rather than a fundamental driver.
S&P 500 Technical Analysis – 1 hour Timeframe
On the 1 hour chart, we can see more closely the divergence with the MACD, which has been going on since the breakout of the key trendline. The buyers are likely to keep leaning on the minor trendline and the red 21 moving average to target the cycle high. The sellers, on the other hand, will want to see the price breaking lower to target a drop into the 4490 level and upon a further break, the support around the 4400 level.
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