S&P 500 News And Technical Analysis – 20 January 2023
20 Jan 2023
Stocks closed lower on Thursday, S&P 500 notch third day of losses
Stocks fell Thursday as investors grew increasingly concerned the Federal Reserve will keep raising rates despite signs of slowing inflation.
The S&P 500 fell 0.76% to 3,898.85
The S&P 500 fell Thursday, weighed down by disappointing quarterly results and rising Treasury yields after data pointing to a still-hot labour market is expected to keep the Federal Reserve on a hawkish path.
Treasury yields continued their advance as fewer than expected initial jobless claims for the third-straight week pointed to a tight labour market that threatens to underpin wage growth and inflation.
About 190,000 people filed for unemployment benefits for the week ended Jan.14, well below economists’ forecast of 214,000. It was the lowest since April.
“Data releases like this are why policymakers continue to reiterate their intention to raise rates,” Jefferies said.
All of the major averages are on pace for their first negative week in three. The Dow is down 3.67% and on pace for its worst weekly performance since September. The S&P and Nasdaq have each lost more than 2% on a weekly basis.
“After the market practically grazed our near-term SPX fair value estimate intraday [4,014 both Tuesday and Wednesday] stocks slid and acted like they needed a breather,” said Christopher Harvey, Wells Fargo Securities head of equity strategy. “The factors driving the sharp YTD rally (short covering, risk bid and lower yields) appear to be hitting their near-term bounds. This will likely will cause the market to trade sideways-to-down over the short term.”
“Despite all the big-tech post-pandemic layoffs, the jobs market remains hot,” said Ed Moya, senior market analyst with currency data and trading firm Oando. “The labour market needs to break to allow the Fed to comfortably keep rates on hold.”
S&P 500 TECHNICAL ANALYSIS
S&P 500 is currently trading in the up channel.
S&P 500 is currently trading below all SMA
RSI is in buying zone which suggests bullishness and Stochastic suggests a downtrend.
S&P 500 immediate resistance is at 3932.91 & its immediate support level is 3910.75
HOW TO TRADE S&P 500 IN THIS WEEK
S&P 500 is trading in up channel, but it made a trend reversal from the resistance zone by making a bearish candle which broke the previous day’s low, so remains bearish on it.
TRADE SUGGESTION-SELL AT 3910.75, TARGET AT 3885.19, SL AT 3946.98