Is the bull market back? Technical levels to watch

Mixed results for Wall Street yesterday

On Thursday, at the end of the market session, we had the following results:

S&P 500 closed slightly negative -0.09%, as well as Dow Jones, which has lost -0.56% but the technological Nasdaq, closed in green with a gain of +0.13%.

Yesterday, Wall Street saw a decline after the previous stock rally driven by the speech of Jerome Powell, the Federal Reserve Chairman, who said that there will be a slow in the pace of the interest rate hikes in December.

Investors are focused on today’s Bureau of Labor Statistics data release, which will include the average hourly earnings, non-farm employment change, and unemployment rate.

The data will be released today at 13:30 GMT and markets will react accordingly.

S&P 500 Technical Analysis - Daily Chart

The S&P 500 price has broken the 200-day MA (green moving average) on Wednesday, following the Federal reserve's chairman's speech about a soft landing.

This breakout is a very bullish signal.

Yesterday we saw an apparent retest of the 200-day moving average as support, which should confirm that a new bullish trend is started.

If the index price can remain above this key level for some time, we should see higher prices in the upcoming days.

However, for that to happen, the S&P price has to break also above 2 major resistance levels: the horizontal line and the trendline at around 4100.

If the price gets rejected at resistance, the potential support levels are the 200-day MA, then the 21-day MA (blue moving average) and then the horizontal support line at around 3900.

The RSI moved higher to 62, indicating a Bullish trend.

Is there going to be enough buying power to push stocks higher and break out above resistance levels, leading to a longer rally?

Or is the index price going to be rejected and generate another drop in price as it happened a few months ago from August to October?

We will find out in the upcoming days.

Fear & Greed Index

The market sentiment is at 65  in the "Greed" mode following the level of 69 registered yesterday.

FedWatch Tool - FED rates probabilities

 
79.4% of investors are expecting the FED to increase the interest rates by 0.50% in the next meeting.

The remaining 20.6% are expecting a 0.75% rate increase.

The data show us that the number of investors expecting an increase of 0.50% is getting higher.

No other options are considered at this stage.

The next FED meeting is on 14 December 2022.