S&P500 (SPX500)
This week's market performance for the SPX500 (S&P500) is expected to be highly volatile, primarily influenced by upcoming Q2 earnings reports and the PCE Prices report on Friday. The recent surge in the Cboe Volatility Index (VIX) indicates heightened market uncertainty due to overbought technicals, a global IT outage, and political instability.
The tech sector, which experienced significant sell-offs recently, will be in the spotlight with major earnings from companies like GOOG, TSLA, and IBM. Despite some analysts' downgrades and soft guidance from several tech firms last quarter, the near-term oversold condition of tech stocks could lead to snap-back rallies, especially if earnings beat expectations.
Economic data releases, including Existing and New Home Sales, Durable Goods Orders, and Q2 GDP, will also be crucial. Any positive surprises here could buoy market sentiment. However, the PCE Prices report on Friday will be particularly critical as it provides insights into inflation trends and the Fed's potential rate decisions.
The Russell 2000's recent outperformance suggests a rotation into small-caps, which could persist unless mega-cap tech companies deliver strong earnings and raise guidance. If tech giants meet or exceed expectations, it might revive the tech trade and stabilize the SPX500. Overall, expect a volatile week with cautious optimism, especially towards the tech sector.
Source: tradingview.com
The SPX500 (S&P 500) exhibits a downward price trend with a current value of $5,504.99, below both the trendline ($5,561.02) and baseline ($5,565.58) levels. The average price target for the end of the week is $5,555.00, based on momentum changes over Fibonacci levels. Optimistically, the target could reach $5,670.00, while pessimistically, it could drop to $5,440.00. Key resistance levels are at $5,518.45 and $5,591.75, with core support at $5,439.34. The RSI of 31.54 suggests the market is oversold but moving sideways. Expect volatility with potential snap-back rallies, particularly influenced by upcoming earnings and the PCE Prices report.
