On the 4-hour chart of the S&P 500 Index (US SPX 500 mini on FXOpen), the ATR indicator with standard settings has not fallen below the 30 mark, signalling higher current market volatility compared to previous periods. Traders’ decisions are being influenced by the ongoing government shutdown, developments around a potential US-China tariff deal, and an increasingly active earnings season. Market sentiment has also been shaped by renewed concerns over regional bank stability and profit-taking in AI-related stocks.

Looking ahead, the new week is also expected to bring heightened volatility, as:

→ US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng are set to meet in the coming days, paving the way for a potential meeting between Presidents Trump and Xi later this month.

→ Attention will also turn to quarterly results from Netflix, Coca-Cola, Tesla, IBM, and Intel. With key US economic data releases suspended due to the government shutdown, investors are likely to look to corporate earnings for direction.

Technical Analysis of the S&P 500 Chart

Major turning points on the 4-hour S&P 500 (US SPX 500 mini on FXOpen) chart, highlighted in bold, outline a broad ascending channel that reflects the market’s expanded price swings.

From a bullish perspective:
→ The price remains in the upper half of the channel.
→ Market sentiment is improving, with prices moving closer to last week’s highs during the European session.
→ As indicated by the arrow, a wide bullish engulfing pattern formed near the lower boundary of the channel, confirming strong buying interest around the 6,560 level.

From a bearish standpoint:
→ Selling pressure was particularly aggressive near 6,720, pushing the price lower on 10 October.
→ Last week, this level once again acted as resistance, suggesting that bears maintain control there, limiting near-term upside potential.

Given these dynamics, traders may wish to adjust their strategies to account for the prevailing volatility. Should positive headlines emerge on US-China trade progress, supported by upbeat corporate forecasts, the S&P 500 (US SPX 500 mini on FXOpen) could make a push towards the upper channel boundary, potentially setting a new record near the 6,800 mark.

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