Grinding up, waiting for data
Quick summary:
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Technical Outlook: SPY is hovering near 720, supported by a positive MACD and rising moving averages, though 4-hour momentum is stretched into overbought territory with immediate support at 713.
After a turbo charged last week, this week is easier. Markets are watching Tuesday’s ISM Services PMI and Friday’s April Non-Farm Payrolls following the recent Fed rate decision with four dissents.
Stronger economic data could prompt profit-taking and test the 713 support, while softer data may sustain rate-cut hopes and drive the breakout above 720.
Following the recent breakout, the SPY has pushed into new highs, hovering around the 720 mark. On the daily chart, the price has broken out of the previous horizontal trend channel, supported by a positive MACD and rising moving averages. Both the 50-day and 200-day moving averages remain in a strong uptrend, suggesting that the broader bullish structure is intact. Zooming into the 4-hour chart, we bounced off support yesterday, setting up a potential leg higher. Support currently sits near 713, which corresponds to the 50-day moving average, with deeper support at 690.
All eyes are now shifting toward this week’s macro data and the aftershocks of the recent FOMC meeting. The Fed held rates at 3.5–3.75%, but the four dissents signaled internal division, keeping markets on their toes regarding the next move. This week brings a heavy economic calendar, starting with Tuesday’s ISM Services PMI and culminating in Friday’s April Non-Farm Payrolls report. Investors are currently pricing in a softer employment number, and any upside surprise here could inject volatility into the market, especially given that market breadth has narrowed to levels not seen since the dot-com era.
When looking at the likely scenarios for the upcoming week, we have two distinct paths. If the employment data or ISM prints come in stronger than expected, we could see the market retrace from these overbought levels, potentially testing the 713 support as profit-takers step in. If this level holds, it would confirm the new higher channel. Alternatively, if the data confirms a cooling economy and keeps rate-cut hopes alive, the breakout above 720 could continue. Watch the setup, not the noise.
The competition
As we dive into this week’s competition results, the S&P 500 is pulling back from record highs as a fresh escalation in the Strait of Hormuz sends Brent crude surging.
With the highly anticipated FOMC rate decision and incoming PMI data on the horizon, our sharpest predictors had to navigate not just geopolitical shocks, but the shifting sands of monetary policy.
Stay focused and keep climbing the ranks!
NOTE: For all those new to the whole thing, read more about it here or watch a video of Scott and myself guiding you through the survey, showing you all its features, and briefly explaining how the competition works.
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