S&P 500 Weekly Recap: A Struggle to Recover
Last week’s market action reflected the ongoing struggle for recovery after the previous week’s sell-off. The market opened cautiously, with buyers stepping in to regain ground lost during the prior downturn. Despite early hesitation, bulls managed to push prices higher, eventually filling the gap created by the earlier sell-off. However, this recovery faced significant resistance from sellers, resulting in minimal upward progression in daily closes.
Strength in the recovery was primarily driven by Financials (XLF), which set a new all-time high. Other sectors, however, remained subdued, aligning with the broader market's hesitant tone. While this selectivity isn’t necessarily negative on its own, when combined with other signals, it may indicate growing risk aversion and a lack of conviction among market participants.
It is also worth zooming into the lower timeframes.
The 584 level provided key support but was retested multiple times during the week, which is not a good sign for buyers. Persistent tests of support typically indicate weakening demand, and bulls should be cautious of this development. Additionally, it was remarkable to observe how the rally went precisely to the Value Area Low (596) of the previous consolidation zone. Buyers should note that the market failed to push higher and close within the value area, signaling potential exhaustion of the current recovery attempt.
The immediate objective for the bulls is to push above 596, reclaiming the previous value area, which would provide stronger validation for the recovery. On the other hand, bears will be focused on taking down the 584 level, where there is likely big liquidity pool.
Next week is rich in terms of key events.
The FOMC minutes are scheduled for release on Tuesday, preceded by significant economic data on Wednesday. These releases will be closely scrutinized as investors remain deeply concerned about the possibility of a recession. Any signals pointing toward a slowing economy could spark fear and trigger increased volatility.
While the long-term market trend remains intact, the warning signs outlined above suggest that investors should hold off on adding to their positions for the time being.
P.S. ES futures are currently rising in the pre-market session. If this momentum doesn't transform into a sell-off after the bell, it will certainly be a positive sign for the buyers.
Strength in the recovery was primarily driven by Financials (XLF), which set a new all-time high. Other sectors, however, remained subdued, aligning with the broader market's hesitant tone. While this selectivity isn’t necessarily negative on its own, when combined with other signals, it may indicate growing risk aversion and a lack of conviction among market participants.
It is also worth zooming into the lower timeframes.
The 584 level provided key support but was retested multiple times during the week, which is not a good sign for buyers. Persistent tests of support typically indicate weakening demand, and bulls should be cautious of this development. Additionally, it was remarkable to observe how the rally went precisely to the Value Area Low (596) of the previous consolidation zone. Buyers should note that the market failed to push higher and close within the value area, signaling potential exhaustion of the current recovery attempt.
The immediate objective for the bulls is to push above 596, reclaiming the previous value area, which would provide stronger validation for the recovery. On the other hand, bears will be focused on taking down the 584 level, where there is likely big liquidity pool.
Next week is rich in terms of key events.
The FOMC minutes are scheduled for release on Tuesday, preceded by significant economic data on Wednesday. These releases will be closely scrutinized as investors remain deeply concerned about the possibility of a recession. Any signals pointing toward a slowing economy could spark fear and trigger increased volatility.
While the long-term market trend remains intact, the warning signs outlined above suggest that investors should hold off on adding to their positions for the time being.
P.S. ES futures are currently rising in the pre-market session. If this momentum doesn't transform into a sell-off after the bell, it will certainly be a positive sign for the buyers.
Publikasi terkait
Pernyataan Penyangkalan
Informasi dan publikasi tidak dimaksudkan untuk menjadi, dan bukan merupakan saran keuangan, investasi, perdagangan, atau rekomendasi lainnya yang diberikan atau didukung oleh TradingView. Baca selengkapnya di Persyaratan Penggunaan.