Market Analysis

US 500 stock index conquers the 50-day line back, but finds resistance on the SMA 200

A little over a year ago Jerome Powell became Chairman of the Fed, the American Federal Reserve. When he took office, Powell was expected to focus on aggressive interest rate hikes. This picture has been changing rapidly in recent weeks and months. His attitude towards rising interest rates has become somewhat cautious.

Although many traders were still assuming last year that a gradual increase in interest rates could take place, there are now increasing voices that think that there might be no more interest rate hikes at all this year. However, this could change over the year.

The Fed’s last central bank meeting was only at the end of January, but investors will at least keep an eye on Fed Chairman Powell’s speech at the Hope Enterprise Corporation Rural Policy Forum today to find out whether Powell will reveal more about his further policy.

The US 500 equity index recovered from its low at the end of last year, and the bulls have been leading the market since the beginning of the year. In the second half of January, the market even managed to regain its 50-day line and has traded above it ever since.

Shortly before reaching the 200-simple moving average (SMA) resistance barrier in the daily time frame, the market stalled at the end of last week.

The MACD is approaching its trigger line. It could be detrimental if it crossed it from top to bottom.

There is an essential structural level for the market around 2,700. From here, the market could start to cross its 200-day line upwards. This must happen if it is to progress to new opportunities in the resistance range of 2,800 to 2,820.

On the other hand, the 200-day line may prove too difficult for the market. If it falls below the 2,700 level again, the next support might be in the 2,630 range.

If the market reaches either of these ranges, it will be time for a new assessment.


US500 Daily Chart | Source: ActivTrader

US500 Daily Chart | Source: ActivTrader 


Written by Daniel Schuetz, External Analyst


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