Market Update 5/1/2024
Latest recap:
The Pullback Of 2024 - April To May [Bounce time over?]
New month & Fed Day!!
Market Sentiment: Fear of the Fed decision is here!
Trade Idea: Short The S&P500 With The “SPY” ETF
S&P 500 Levels - S: 4980 or 100MA; R: 5060 or 10MA
MY BULL/BEAR RATIO: NEUTRAL BIAS
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The Pullback Of 2024 - April To May [Bounce time…]
The U.S. stock market ended its five-month streak of gains in April, stoking concerns over escalating inflation and the possibility of the Federal Reserve maintaining a tight monetary stance.
Despite some encouraging first-quarter earnings reports, all major U.S. indices concluded the month in the red, weighed down by macroeconomic worries. The S&P 500, dropped by 4%, recording its worst performance since September 2023 and ending its five-month stretch of gains.
As of this, the market pullback has officially started in April and could be ending in May, so in this month.
And speaking about May month, it is starting with a bang as traders are now looking toward the Fed’s interest rate decision today on this afternoon.
The Fed decision and press conference today is certainly the biggest catalyst for the markets traders have been waiting for.
The one million question now is: Will the Fed news later today bring the markets to its knees or will it let the markets spike? According to the chart setup (see “Live S&P500 Futures - Pre-Market Analysis”) we have a bearish chart setup, increasing the odds for a spike to the downside. But maybe Powell has also a nasty suprise to share that the markets is not expecting to hear?;)
New Month & Fed Day!!
Imagine you are getting enormous important economic data today but no one cares - this is because we have the Fed Day and Fed members already made their decision and statements ready to deliver.
It is sad but that is how it is.
So all eyes on the Fed press statement scheduled to release at 2pm ET and the press conference with Fed Chair Powell at 2:30pm ET.
Everyone is clear the Fed wont change short-term rates (at 5.5%) due to high inflation, however, traders want to understand if the Fed will still apply rate cuts in 2024 or not. This will be the game changer for the markets today!
Today there will be even more earning reports (318). But like it is for the economic updates today, it also accounts to the earnings: No one really cares about earnings on a the Fed Day!
Market Sentiment
Now this is interesting - the sentiment is fearful again mainly due to the Fed decision today.
Trade Idea: Short The S&P500 With The “SPY” ETF
April 1st: The SPY pullback began, reaching the first significant threshold with a decrease of 5.9% to 495 after 15 trading sessions. This decline, measured from the previous all-time high, reflects heightened market volatility under current economic conditions.
April 19th: This date marked a temporary bottom at an index level of 495. Subsequently, the ETF rallied over the next six days, approaching a strong counterrally resistance between 510 and 512.
The counterrally is so strong that even the MACD indicator is about to do a bullish crossover now, typically signifies a potential upward movement in the price of an asset, suggesting that it might be a good time to consider buying.
However, we are also at resistance which could provide another turning point over the short-term.
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Live S&P500 Futures - Pre-Market Analysis
The current S&P 500 is below the 10-day moving average (MA) as well as 20-day and 50-day MAs, usually a very bearish sign going into the Fed Day.
The promising bullish momentum got killed with the massive selling into the close yesterday, turning even the MACD bearish again. The current price is also under the 5060 support which could signal more selling to come.
According to the bearish chart setup, the market is expecting hawkish news from the Fed and Fed Chairman Powell. Only a positive nasty surprise that bears are not having on their plate could send the markets soaring higher today.
Levels to watch S: 4980 or 100MA; R: 5060 or 10MA
Pro Bullish:
New ALL-TIME-HIGHs!Bullish momentumAbove the daily
10MA, 20MA, 100MA, 200MAAbove the weekly
10MA, 20MA, 50MA, 100MA, 200MAAbove the monthly 10MA, 20MA, 50MA, 100MA, 200MA
10/20MA daily goldencross10/50MA daily goldencross20/50MA daily goldencross
20/100MA daily goldencross
50/100MA weekly goldencross
Strong Fourth Quarter of 2023
Strong First Quarter of 2024
Strong January Month of 2024
Strong February Month of 2024
Strong March Month of 2024
Price Target: 5,100-5,200 ACHIEVED (Wall Street Consensus for 2024!)
NEW Price Target: 5,500 (Oppenheimer Wall Street Bank March Update)
NEW Price Target: 5,700 (Fundstrat's Tom Lee April Update)
Blow-Off Top: 5,500-6,136
Pro Bearish:
Market is rolling over
Bearish downtrend channel
Long-term trendline break confirmed!
Weak April month
Wall Street’s 5100 price target for the year 2024 already achieved!
Wall Street’s 5200 price target for the year 2024 already achieved!
Market Sentiment was at EUPHORIA level
Below the weekly 10MA
Below the daily 10MA, 20MA, 50MA
10/20MA daily deathcross
10/50MA daily deathcross
20/50MA daily deathcross
Weakening bullish momentum / Bearish momentum
Potential bearish head and shoulders pattern
Geopolitical Risk: Middle East Crisis / Ukraine Crisis
Currency Risk: Japan’s Yen Currency, US-Dollar crisis looming/happening
PULLBACK PT: 4,808-4,980
MY BULL/BEAR RATIO: NEUTRAL BIAS
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Have a happy trading day!
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