The S&P500 Futures (CME: ES) have been on an unprecedented upward trajectory, soaring to new all-time highs amidst a remarkable year-to-date gain of 8.55%.
This relentless ascent, punctuated by only two weeks of losses since the year’s inception, underscores the index’s robust bullish momentum. The recent upward momentum witnessed during Thursday’s trading session, where the futures rose by an impressive 1%, spilt over into the closing day of the week with a further 1% gain.
The optimism surrounding potential Federal Reserve rate cuts is driving this bullish sentiment, fuelled by Fed Chair Jerome Powell’s reassuring remarks to a U.S. Senate committee. Powell’s indication that the central bank is nearing confidence in inflation’s decline towards the 2% target has bolstered investor expectations for rate cuts, with June now eyed as a potential timeline. Against this backdrop, sectors within the S&P 500, particularly information technology and communications services, have flourished, further cementing the index’s bullish stance. All eyes will turn to today’s Nonfarm Payrolls as traders attempt to decipher whether the prospects of rate cuts will be warranted.
Technical
The S&P500 Futures have exhibited a robust uptrend, supported by technical indicators such as the ascending channel pattern and trading above the 100-day moving average.
Friday’s session highlighted the strength of this trend as the futures gapped up at the open, breaking above the ascending channel to establish a new all-time high at 5237.25. This level now potentially acts as a resistance amidst current market conditions.
The rally, originating from the 5063.00 level after a minor dip, underscores the bullish control over the index futures. Further gains could be anticipated, with the 23.60% Fibonacci Extension level serving as a potential upside target if buying momentum persists. However, should downside pressures resurface amid overbought RSI conditions, the upper boundary of the ascending channel may provide support. Market sentiment remains optimistic, buoyed by the evident strength in the uptrend and the potential for continued gains.
Summary
Amidst record highs and bullish sentiment, the S&P500 Futures showcase resilience with a robust uptrend, poised for further gains. Key technical levels, like the new all-time high at 5237.25 and the ascending channel, potentially guide traders amidst market optimism, driven by prospects of Fed rate cuts.
Sources: Dow Jones Newswires, 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.
