FXOpen
The ATR indicator on the S&P 500’s 4-hour chart (US SPX 500 mini on FXOpen) currently shows a reduction in price volatility.
This drop in volatility can likely be attributed to:
→ The market having fully absorbed the impact of Trump’s recent presidential win;
→ No unexpected news from yesterday’s CPI report, which matched analysts’ inflation expectations.
Looking ahead, Morgan Stanley analysts believe the bull market could face challenges from:
→ A rise in treasury bond yields, potentially diverting investor funds;
→ A strengthening dollar, which could reduce export revenues for large companies;
→ Indicators suggesting stock valuations are becoming even more stretched.
Technical analysis of the S&P 500 chart (US SPX 500 mini on FXOpen) highlights that price is at a resistance zone created by:
→ The upper boundary of the upward blue channel, which began in early September;
→ The upper edge of the long-term ascending channel (shown in orange, previously charted in our S&P 500 analysis on October 14);
→ The psychological level of 6,000 points.
Given these factors, it’s reasonable to anticipate that bulls may encounter difficulties if they attempt to push past the 6,000 level.
A potential pullback may emerge following the S&P 500's 4% rise since early November—perhaps towards the channel’s median or lower boundary.
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This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
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