The S&P500 Futures (CME: ES) closed a fifth week in a row in the green, up 6.89% from the prior month’s lows. A cocktail of factors contributed to traders opening the door on risk-on sentiment.
The U.S. economy is showing signs of a probable Federal Reserve Pivot ahead, with traders wagering a 78.00% chance of the Federal Reserve easing rates by the end of the year.
The Banking Sector Crisis is seemingly in the rearview mirror as the banking sector has regained losses incurred from the sell-off during peak panic. But driving the upbeat mood is the better-than-expected earnings across some of the biggest banks in the world.
The S&P500 Futures have trended higher with price trading within an ascending channel pattern, above its 100-day moving average. Support and resistance were formed at the 4100.75 and 4207.25 levels, respectively.
With bullish traders out to play, the rejection of the ascending channel’s support could signal the presence of bullish momentum. If bulls look to take the index higher, the 4207.25 level could become a doable feat for bullish traders. A breakout above the level on high volumes could signal the market’s interest in taking the index through a leg up, with the ascending channel’s resistance in sight.
Alternatively, if bearish sentiment undoes bullish momentum, the 4207.25 level could be a point of interest for traders looking to short the market. The bears will likely look to the 4100.75 level with interest if they outdo the bulls.
The U.S. Labour Market, Home Sales and PMI data lie ahead, with further earnings set to be released during the course of the week. The S&P500 Futures will likely be boosted by a weakening U.S. economy as bets of Fed Rate hikes subside. With earnings in the picture, traders will probably proceed cautiously as they determine the performance of listed businesses in the prior quarter.
Sources: Reuters, CNBC, TradingView