The S&P500 Futures (CME: ES) experienced a tumultuous ride in the prior week, marked by bullish optimism giving way to bearish pressures.
Surging to an all-time high, traders drove the index futures higher, buoyed by robust earnings results across various sectors and mounting expectations of potential rate cuts this year. However, this upward momentum faced resistance as the February Nonfarm Payrolls (NFP) report exceeded forecasts, clocking in at 275K against an expected 200K, albeit slightly surpassing the prior month’s figure.
This unexpected surge in job creation prompted market participants to take profits, leading to a sell-off in risk assets. As the new week unfolds, market participants eagerly await the U.S. Inflation Rate release, poised to serve as a crucial barometer for assessing the necessity of forthcoming rate adjustments. All eyes remain fixated on how these economic indicators will shape the future trajectory of the S&P500 Futures and broader financial markets.
Technical
The S&P500 Futures have been navigating an uptrend, marked by the share price’s consistent trading above the 100-day moving average. Within this upward trajectory, the index futures have been confined within an ascending channel pattern, indicating sustained bullish sentiment among traders.
This optimism was fuelled by excessive buying activity, propelling the futures to reach an all-time high and establishing a support level of 5063.00. However, as the price approached the peak at 5257.25, a resistance level emerged, triggering a downturn amid overbought RSI conditions.
Despite initially breaking beyond the ascending channel’s upper boundary, the futures retraced back within the pattern’s confines. Presently, the retracement has brought the index futures within reach of the 50% Fibonacci Retracement level. Should selling pressures persist, a test of the 50% level seems imminent. A breach beneath this level could signal intensified selling, potentially targeting the 61.80% Golden Ratio. Conversely, a resurgence in upside momentum could shift focus back to the 5257.25 resistance level, highlighting the ongoing battle between bullish and bearish forces shaping the S&P500 Futures’ price action.
Summary
The S&P500 Futures witnessed a rollercoaster ride, with bullish sentiment challenged by bearish pressures. As traders eagerly await the U.S. Inflation Rate release, the futures remain in an uptrend but face resistance at 5257.25. A breach of the 50% Fibonacci Retracement level may signal intensified selling, highlighting market uncertainties.
Sources: U.S. Bureau of Labor Statistics, Reuters, TradingView
Piece Written By Nkosilathi Dube, Trive Financial Market Analyst
Disclaimer: Trive South Africa (Pty) Ltd (hereinafter referred to as “Trive SA”), with registration number 2005/011130/07, is an authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act, 37 of 2002. Trive SA is authorised and regulated by the South African Financial Sector Conduct Authority (FSCA) and holds FSP number 27231. Trive Financial Services Ltd (hereinafter referred to as “Trive MU”) holds an Investment Dealer (Full-Service Dealer, excluding Underwriting) Licence with licence number GB21026295 pursuant to section 29 of the Securities Act 2005, Rule 4 of the Securities Rules 2007, and the Financial Services Rules 2008. Trive MU is authorized and regulated by the Mauritius Financial Services Commission (FSC) and holds Global Business Licence number GB21026295 under Section 72(6) of the Financial Services Act. Trive SA and Trive MU are collectively known and referred to as “Trive Africa”.
Market and economic conditions are subject to sudden change which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. Trive Africa and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered. Please consider the risks involved before you trade or invest. All trades on the Trive Africa platform are subject to the legal terms and conditions to which you agree to be bound. Brand Logos are owned by the respective companies and not by Trive Africa. The use of a company’s brand logo does not represent an endorsement of Trive Africa by the company, nor an endorsement of the company by Trive Africa, nor does it necessarily imply any contractual relationship. Images are for illustrative purposes only and past performance is not necessarily an indication of future performance. No services are offered to stateless persons, persons under the age of 18 years, persons and/or residents of sanctioned countries or any other jurisdiction where the distribution of leveraged instruments is prohibited, and citizens of any state or country where it may be against the law of that country to trade with a South African and/or Mauritius based company and/or where the services are not made available by Trive Africa to hold an account with us. In any case, above all, it is your responsibility to avoid contravening any legislation in the country from where you are at the time.
CFDs and other margin products are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how these products work and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. See our full Risk Disclosure and Terms of Business for further details. Some or all of the services and products are not offered to citizens or residents of certain jurisdictions where international sanctions or local regulatory requirements restrict or prohibit them.
