Nasdaq Eyes 16K, S&P 500 Whisker Away From 5k, Dow Jones Lags Behind: What's Next?
The bull market rages on, so far undeterred by the likely delay in interest rate cuts and hawkish statements from Fed officials.
Several factors have contributed to this resilience. Primarily, there's the increasingly probable scenario of a soft landing in the U.S. economy.
Additionally, a positive overall Q4 earnings season has given the market further breath, showing that the better-than-feared economy conditions are resulting in similarly strong corporate profitability. On top of that, the AI narrative has maintained interest in tech companies strong, as investors anticipate further inflows of speculative capital into the segment as financial conditions improve.
On the downside, however, we're also witnessing the potential spark of the next installment of the banking crisis, with New York Community Bancorp (NYSE:NYCB) facing problems.
The commercial real estate sector, too, is under scrutiny. Recently, Federal Reserve Chairman Jerome Powell acknowledged that some small banks may need to be taken over or closed.
As the market weights in the fundamental factors supporting the current price action, let's have a look at the technical indicators that will likely present interesting trading opportunities.
As the S&P 500 continues its upward trajectory, recent rebounds have been relatively flat, offering limited opportunities for connections to the main trend at more favorable prices.
Presently, investor attention should be focused on the 5000-point level, where a potential reaction and deceleration could occur.
The first signal of a larger correction will be the breakout of the upward-sloping trend line and the descent below 4900 points. The first area of support to look at in terms of joining the train is the area
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