The S&P500 Futures (CME: ES) surged magnificently, celebrating its most robust performance yet in 2024. During Monday’s trading session, the index futures soared impressively by 1.40%, marking a second consecutive day of bullish strides. This bullish momentum was underlined by a sweeping advance across ten of the 11 S&P sectors, with technology, consumer discretionary, and communication services leading the charge.
The ascent of the index futures was notably propelled by the stalwarts of the tech sector, particularly the chip stocks, heralding a substantial leap. Among these, Nvidia Corporation scaled new heights, riding on the crest of its announcement, unveiling cutting-edge AI processors and software. These groundbreaking advancements are poised to enhance AI computing for consumers and developers, igniting market enthusiasm.
With eyes keenly set on Thursday’s US inflation data, traders are primed to decipher its implications on the trajectory of US monetary policy.
Technical
The S&P500 Futures recently grappled with a downtrend, slipping beneath the crucial 100-day moving average on the 4H chart, initially signalling bearish territory. Yet, the index futures edged past the 100-day moving average amid Monday’s rally, hinting at a potential shift in sentiment.
This bullish surge commenced from the 4702.00 level, coinciding with oversold RSI conditions, crafting a fresh support level. After crossing above the 61.80% Fibonacci Retracement Golden Ratio, attention will likely fixate on the 4841.50 resistance, a focal point that could witness retesting if the upward momentum endures. However, a reversal scenario looms if downward pressures outweigh the current bullish momentum, potentially revisiting the Golden Ratio.
Thursday’s impending release of inflation data is poised to inject a surge of volatility into the market landscape, potentially charting a definitive course for the index futures. Traders eagerly anticipate the implications this data might wield over US equities and the Greenback.
Summary
The recent surge in S&P500 Futures, powered by the tech sector’s robust performance, paints a compelling picture of bullish momentum. Amidst technical signals hinting at a potential sentiment shift, attention will likely gravitate towards key resistance at 4841.50. However, looming volatility from Thursday’s inflation data stands as a pivotal determinant, shaping the index’s trajectory and defining market sentiments.
Sources: Reuters, Wall Street Journal, Dow Jones Newswires, TradingView
Piece Written By Nkosilathi Dube, Trive Financial Market Analyst
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