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Major U.S. equity index futures mixed, little changed
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Apr NY Fed manufacturing index 10.8 vs -18.0 est
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Euro STOXX 600 index ~flat
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Dollar up slightly; gold ~flat; crude, bitcoin decline
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U.S. 10-Year Treasury yield rises to ~3.56%
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S&P 500 INDEX: ABOUT TO BE A BREAK IN CLOUDS? (0900 EDT/1300 GMT) The S&P 500 index ended last week flirting some major chart barriers. Thus, bulls may soon learn whether their worries are just like passing clouds, or if instead, another storm may be brewing. The SPX hit a high on Friday of 4,163.19 before closing out the week at 4,137.64. Thus, the benchmark index flirted with the upper edge of the weekly Ichimoku cloud, which resides around 4,155. Ichimoku cloud is technical indicator which displays support and resistance, identifies trends, and measures momentum. Utilizing midpoints of ranges, a number of lines are generated. Two of these lines are used to create cloud boundaries. The entire cloud is shifted forward in time in order to provide a glimpse of future support and resistance:
Once the SPX broke below the cloud in May of last year, it has failed to thrust back above it on a weekly closing basis. Indeed, rallies failed in early-June, mid-August, mid-December, and in early-February of 2023. Thus, the 4,155 level presents an important hurdle. Add in additional resistance at the early-February high at 4,195.44, the 23.6% Fibonacci retracement of the March 2020-January 2022 advance at 4,198.70, the Fed-Chair Powell August-26 Jackson Hole speech high at 4,203.04, and the 100-week moving average, which ended Friday at 4,203.49, and bulls may have their heads in the clouds if they expect the SPX will be able to continue to advance. That said, clearing these barriers will have the potential to add credence to the view that the SPX saw a major low in October, and suggest that its trend inflection is only strengthening.
(Terence Gabriel)
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(Terence Gabriel is a Reuters market analyst. The views
expressed are his own)
