1) Caution: the S&P 500 is now in short-term technical overbought territory and may enter a retracement (without jeopardizing the underlying uptrend)
Over the past two weeks, the S&P 500 future contract has technically broken above its all-time high of 6,150 points, thereby validating a signal that the underlying uptrend is continuing. The market has risen for several consecutive sessions without pausing, and is now overbought in the short term. From a purely technical point of view, the market is therefore exposed to a reversal, and a test of its former all-time high is a possible scenario for deflating short-term overboughtness and waiting for dynamic support.
The chart below shows the monthly, weekly and daily Japanese candlesticks for the S&P 500 future contract. You can see that there is still potential on the long-term timeframes, but the short-term framework (daily timeframe) is overbought in terms of momentum (momentum being represented here by the RSI technical indicator). The market will need to be able to hold the 6000/6150 technical support in order to preserve the uptrend in place since the beginning of April.
2) The US labor market remains resilient according to the latest NFP report, which is good news for the macro-economic situation, but postpones the FED rate cut
The US job market has just delivered an unexpected signal: the unemployment rate has fallen to 4.1% of the working population, after several months of stability around 4.2%. Although this drop may seem modest, it comes at a time when the Federal Reserve (Fed) is closely monitoring the labor market for signs of a more pronounced slowdown in economic activity. This drop in unemployment suggests that, despite the monetary tightening of the past two years, the US economy remains resilient. It is now unlikely that the FED will resume cutting the federal funds rate on Wednesday July 30.
3) BEWARE of the Wednesday July 9 deadline for trade agreements between the USA and its trading partners
US President Donald Trump has confirmed that the USA plans to send a series of official notifications to several trading partners from this Friday July 4, setting unilateral tariffs that will take effect from August 1. A dozen letters will be sent initially, followed by further mailings over the next few days. This marks a new stage in his strategy of pressuring foreign countries to conclude agreements before the deadline he had announced for Wednesday July 9.
At this stage, it seems unlikely that the Wednesday July 9 deadline will be extended. So it's important to bear in mind that the trend at the very beginning of next week will be directly influenced by the news coming in on the trade war/diplomacy. The S&P 500 index will react very directly to this information. We need trade agreements with China, India, the European Union and Japan if we are not to jeopardize the S&P 500's fundamental uptrend.
DISCLAIMER:
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only. The presented idea (including market commentary, market data and observations) is not a work product of any research department of Swissquote or its affiliates. This material is intended to highlight market action and does not constitute investment, legal or tax advice. If you are a retail investor or lack experience in trading complex financial products, it is advisable to seek professional advice from licensed advisor before making any financial decisions.
This content is not intended to manipulate the market or encourage any specific financial behavior.
Swissquote makes no representation or warranty as to the quality, completeness, accuracy, comprehensiveness or non-infringement of such content. The views expressed are those of the consultant and are provided for educational purposes only. Any information provided relating to a product or market should not be construed as recommending an investment strategy or transaction. Past performance is not a guarantee of future results.
Swissquote and its employees and representatives shall in no event be held liable for any damages or losses arising directly or indirectly from decisions made on the basis of this content.
The use of any third-party brands or trademarks is for information only and does not imply endorsement by Swissquote, or that the trademark owner has authorised Swissquote to promote its products or services.
Swissquote is the marketing brand for the activities of Swissquote Bank Ltd (Switzerland) regulated by FINMA, Swissquote Capital Markets Limited regulated by CySEC (Cyprus), Swissquote Bank Europe SA (Luxembourg) regulated by the CSSF, Swissquote Ltd (UK) regulated by the FCA, Swissquote Financial Services (Malta) Ltd regulated by the Malta Financial Services Authority, Swissquote MEA Ltd. (UAE) regulated by the Dubai Financial Services Authority, Swissquote Pte Ltd (Singapore) regulated by the Monetary Authority of Singapore, Swissquote Asia Limited (Hong Kong) licensed by the Hong Kong Securities and Futures Commission (SFC) and Swissquote South Africa (Pty) Ltd supervised by the FSCA.
Products and services of Swissquote are only intended for those permitted to receive them under local law.
All investments carry a degree of risk. The risk of loss in trading or holding financial instruments can be substantial. The value of financial instruments, including but not limited to stocks, bonds, cryptocurrencies, and other assets, can fluctuate both upwards and downwards. There is a significant risk of financial loss when buying, selling, holding, staking, or investing in these instruments. SQBE makes no recommendations regarding any specific investment, transaction, or the use of any particular investment strategy.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts suffer capital losses when trading in CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Digital Assets are unregulated in most countries and consumer protection rules may not apply. As highly volatile speculative investments, Digital Assets are not suitable for investors without a high-risk tolerance. Make sure you understand each Digital Asset before you trade.
Cryptocurrencies are not considered legal tender in some jurisdictions and are subject to regulatory uncertainties.
The use of Internet-based systems can involve high risks, including, but not limited to, fraud, cyber-attacks, network and communication failures, as well as identity theft and phishing attacks related to crypto-assets.
Over the past two weeks, the S&P 500 future contract has technically broken above its all-time high of 6,150 points, thereby validating a signal that the underlying uptrend is continuing. The market has risen for several consecutive sessions without pausing, and is now overbought in the short term. From a purely technical point of view, the market is therefore exposed to a reversal, and a test of its former all-time high is a possible scenario for deflating short-term overboughtness and waiting for dynamic support.
The chart below shows the monthly, weekly and daily Japanese candlesticks for the S&P 500 future contract. You can see that there is still potential on the long-term timeframes, but the short-term framework (daily timeframe) is overbought in terms of momentum (momentum being represented here by the RSI technical indicator). The market will need to be able to hold the 6000/6150 technical support in order to preserve the uptrend in place since the beginning of April.
2) The US labor market remains resilient according to the latest NFP report, which is good news for the macro-economic situation, but postpones the FED rate cut
The US job market has just delivered an unexpected signal: the unemployment rate has fallen to 4.1% of the working population, after several months of stability around 4.2%. Although this drop may seem modest, it comes at a time when the Federal Reserve (Fed) is closely monitoring the labor market for signs of a more pronounced slowdown in economic activity. This drop in unemployment suggests that, despite the monetary tightening of the past two years, the US economy remains resilient. It is now unlikely that the FED will resume cutting the federal funds rate on Wednesday July 30.
3) BEWARE of the Wednesday July 9 deadline for trade agreements between the USA and its trading partners
US President Donald Trump has confirmed that the USA plans to send a series of official notifications to several trading partners from this Friday July 4, setting unilateral tariffs that will take effect from August 1. A dozen letters will be sent initially, followed by further mailings over the next few days. This marks a new stage in his strategy of pressuring foreign countries to conclude agreements before the deadline he had announced for Wednesday July 9.
At this stage, it seems unlikely that the Wednesday July 9 deadline will be extended. So it's important to bear in mind that the trend at the very beginning of next week will be directly influenced by the news coming in on the trade war/diplomacy. The S&P 500 index will react very directly to this information. We need trade agreements with China, India, the European Union and Japan if we are not to jeopardize the S&P 500's fundamental uptrend.
DISCLAIMER:
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only. The presented idea (including market commentary, market data and observations) is not a work product of any research department of Swissquote or its affiliates. This material is intended to highlight market action and does not constitute investment, legal or tax advice. If you are a retail investor or lack experience in trading complex financial products, it is advisable to seek professional advice from licensed advisor before making any financial decisions.
This content is not intended to manipulate the market or encourage any specific financial behavior.
Swissquote makes no representation or warranty as to the quality, completeness, accuracy, comprehensiveness or non-infringement of such content. The views expressed are those of the consultant and are provided for educational purposes only. Any information provided relating to a product or market should not be construed as recommending an investment strategy or transaction. Past performance is not a guarantee of future results.
Swissquote and its employees and representatives shall in no event be held liable for any damages or losses arising directly or indirectly from decisions made on the basis of this content.
The use of any third-party brands or trademarks is for information only and does not imply endorsement by Swissquote, or that the trademark owner has authorised Swissquote to promote its products or services.
Swissquote is the marketing brand for the activities of Swissquote Bank Ltd (Switzerland) regulated by FINMA, Swissquote Capital Markets Limited regulated by CySEC (Cyprus), Swissquote Bank Europe SA (Luxembourg) regulated by the CSSF, Swissquote Ltd (UK) regulated by the FCA, Swissquote Financial Services (Malta) Ltd regulated by the Malta Financial Services Authority, Swissquote MEA Ltd. (UAE) regulated by the Dubai Financial Services Authority, Swissquote Pte Ltd (Singapore) regulated by the Monetary Authority of Singapore, Swissquote Asia Limited (Hong Kong) licensed by the Hong Kong Securities and Futures Commission (SFC) and Swissquote South Africa (Pty) Ltd supervised by the FSCA.
Products and services of Swissquote are only intended for those permitted to receive them under local law.
All investments carry a degree of risk. The risk of loss in trading or holding financial instruments can be substantial. The value of financial instruments, including but not limited to stocks, bonds, cryptocurrencies, and other assets, can fluctuate both upwards and downwards. There is a significant risk of financial loss when buying, selling, holding, staking, or investing in these instruments. SQBE makes no recommendations regarding any specific investment, transaction, or the use of any particular investment strategy.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts suffer capital losses when trading in CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Digital Assets are unregulated in most countries and consumer protection rules may not apply. As highly volatile speculative investments, Digital Assets are not suitable for investors without a high-risk tolerance. Make sure you understand each Digital Asset before you trade.
Cryptocurrencies are not considered legal tender in some jurisdictions and are subject to regulatory uncertainties.
The use of Internet-based systems can involve high risks, including, but not limited to, fraud, cyber-attacks, network and communication failures, as well as identity theft and phishing attacks related to crypto-assets.
This content is written by Vincent Ganne for Swissquote.
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only and does not constitute investment, legal or tax advice.
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only and does not constitute investment, legal or tax advice.
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Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.
This content is written by Vincent Ganne for Swissquote.
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only and does not constitute investment, legal or tax advice.
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only and does not constitute investment, legal or tax advice.
Penerbitan berkaitan
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.