Last week, the S&P 500 index entered a consolidation phase amid a packed fundamental calendar. The Fed’s monetary decision, PCE inflation, the NFP report, and trade negotiations all triggered short-term profit-taking. However, this consolidation has remained technically well-structured, with key supports intact, and the broader trend remains bullish.
Let’s conduct a technical assessment as this week unfolds under geopolitical pressure, with the Friday, August 8 ultimatum set for Russia.
1. The underlying trend in the S&P 500 remains bullish above the major support at 6050/6150 points
Let’s first examine the different timeframes for the S&P 500 futures contract. The triptych below shows monthly, weekly, and daily candlesticks. All three timeframes send the same message: the underlying trend in the S&P 500 remains bullish as long as the major support at 6050/6150 points holds on a weekly closing basis. This support zone corresponds to the former all-time high from last winter. In the short term, a retest of the support cannot be ruled out before the trend resumes.
2. Quantitative analysis does not show an overbought situation, with the percentage of stocks above the 50-day moving average still below extreme levels
Last week’s consolidation helped deflate a potential overbought condition. The percentage of S&P 500 stocks trading above their 50-day moving average was approaching an overbought zone, but is now back to 50%, giving the index renewed capacity to resume its bullish trend.
3. The Dow Jones is in an accumulation phase below its all-time high
The Dow Jones also shows a promising technical setup, potentially forming a bullish continuation inverse head-and-shoulders pattern. A breakout above the 45,000-point resistance is needed to confirm this signal. The equal-weighted S&P 500 index shows a similar technical structure.
4. Retail investor sentiment is still far from euphoric extremes
Market tops are always built in euphoria, especially among retail traders. According to the latest data from the American Association of Individual Investors (AAII), buying interest has increased and is slightly above the historical average, but still far from its typical overheating zone. This sentiment indicator confirms that the underlying trend in the S&P 500 remains bullish above the 6050/6150-point support (based on S&P 500 futures).
DISCLAIMER:
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only. The presented idea (including market commentary, market data and observations) is not a work product of any research department of Swissquote or its affiliates. This material is intended to highlight market action and does not constitute investment, legal or tax advice. If you are a retail investor or lack experience in trading complex financial products, it is advisable to seek professional advice from licensed advisor before making any financial decisions.
This content is not intended to manipulate the market or encourage any specific financial behavior.
Swissquote makes no representation or warranty as to the quality, completeness, accuracy, comprehensiveness or non-infringement of such content. The views expressed are those of the consultant and are provided for educational purposes only. Any information provided relating to a product or market should not be construed as recommending an investment strategy or transaction. Past performance is not a guarantee of future results.
Swissquote and its employees and representatives shall in no event be held liable for any damages or losses arising directly or indirectly from decisions made on the basis of this content.
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All investments carry a degree of risk. The risk of loss in trading or holding financial instruments can be substantial. The value of financial instruments, including but not limited to stocks, bonds, cryptocurrencies, and other assets, can fluctuate both upwards and downwards. There is a significant risk of financial loss when buying, selling, holding, staking, or investing in these instruments. SQBE makes no recommendations regarding any specific investment, transaction, or the use of any particular investment strategy.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts suffer capital losses when trading in CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Digital Assets are unregulated in most countries and consumer protection rules may not apply. As highly volatile speculative investments, Digital Assets are not suitable for investors without a high-risk tolerance. Make sure you understand each Digital Asset before you trade.
Cryptocurrencies are not considered legal tender in some jurisdictions and are subject to regulatory uncertainties.
The use of Internet-based systems can involve high risks, including, but not limited to, fraud, cyber-attacks, network and communication failures, as well as identity theft and phishing attacks related to crypto-assets.
Let’s conduct a technical assessment as this week unfolds under geopolitical pressure, with the Friday, August 8 ultimatum set for Russia.
1. The underlying trend in the S&P 500 remains bullish above the major support at 6050/6150 points
Let’s first examine the different timeframes for the S&P 500 futures contract. The triptych below shows monthly, weekly, and daily candlesticks. All three timeframes send the same message: the underlying trend in the S&P 500 remains bullish as long as the major support at 6050/6150 points holds on a weekly closing basis. This support zone corresponds to the former all-time high from last winter. In the short term, a retest of the support cannot be ruled out before the trend resumes.
2. Quantitative analysis does not show an overbought situation, with the percentage of stocks above the 50-day moving average still below extreme levels
Last week’s consolidation helped deflate a potential overbought condition. The percentage of S&P 500 stocks trading above their 50-day moving average was approaching an overbought zone, but is now back to 50%, giving the index renewed capacity to resume its bullish trend.
3. The Dow Jones is in an accumulation phase below its all-time high
The Dow Jones also shows a promising technical setup, potentially forming a bullish continuation inverse head-and-shoulders pattern. A breakout above the 45,000-point resistance is needed to confirm this signal. The equal-weighted S&P 500 index shows a similar technical structure.
4. Retail investor sentiment is still far from euphoric extremes
Market tops are always built in euphoria, especially among retail traders. According to the latest data from the American Association of Individual Investors (AAII), buying interest has increased and is slightly above the historical average, but still far from its typical overheating zone. This sentiment indicator confirms that the underlying trend in the S&P 500 remains bullish above the 6050/6150-point support (based on S&P 500 futures).
DISCLAIMER:
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only. The presented idea (including market commentary, market data and observations) is not a work product of any research department of Swissquote or its affiliates. This material is intended to highlight market action and does not constitute investment, legal or tax advice. If you are a retail investor or lack experience in trading complex financial products, it is advisable to seek professional advice from licensed advisor before making any financial decisions.
This content is not intended to manipulate the market or encourage any specific financial behavior.
Swissquote makes no representation or warranty as to the quality, completeness, accuracy, comprehensiveness or non-infringement of such content. The views expressed are those of the consultant and are provided for educational purposes only. Any information provided relating to a product or market should not be construed as recommending an investment strategy or transaction. Past performance is not a guarantee of future results.
Swissquote and its employees and representatives shall in no event be held liable for any damages or losses arising directly or indirectly from decisions made on the basis of this content.
The use of any third-party brands or trademarks is for information only and does not imply endorsement by Swissquote, or that the trademark owner has authorised Swissquote to promote its products or services.
Swissquote is the marketing brand for the activities of Swissquote Bank Ltd (Switzerland) regulated by FINMA, Swissquote Capital Markets Limited regulated by CySEC (Cyprus), Swissquote Bank Europe SA (Luxembourg) regulated by the CSSF, Swissquote Ltd (UK) regulated by the FCA, Swissquote Financial Services (Malta) Ltd regulated by the Malta Financial Services Authority, Swissquote MEA Ltd. (UAE) regulated by the Dubai Financial Services Authority, Swissquote Pte Ltd (Singapore) regulated by the Monetary Authority of Singapore, Swissquote Asia Limited (Hong Kong) licensed by the Hong Kong Securities and Futures Commission (SFC) and Swissquote South Africa (Pty) Ltd supervised by the FSCA.
Products and services of Swissquote are only intended for those permitted to receive them under local law.
All investments carry a degree of risk. The risk of loss in trading or holding financial instruments can be substantial. The value of financial instruments, including but not limited to stocks, bonds, cryptocurrencies, and other assets, can fluctuate both upwards and downwards. There is a significant risk of financial loss when buying, selling, holding, staking, or investing in these instruments. SQBE makes no recommendations regarding any specific investment, transaction, or the use of any particular investment strategy.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts suffer capital losses when trading in CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Digital Assets are unregulated in most countries and consumer protection rules may not apply. As highly volatile speculative investments, Digital Assets are not suitable for investors without a high-risk tolerance. Make sure you understand each Digital Asset before you trade.
Cryptocurrencies are not considered legal tender in some jurisdictions and are subject to regulatory uncertainties.
The use of Internet-based systems can involve high risks, including, but not limited to, fraud, cyber-attacks, network and communication failures, as well as identity theft and phishing attacks related to crypto-assets.
This content is written by Vincent Ganne for Swissquote.
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only and does not constitute investment, legal or tax advice.
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only and does not constitute investment, legal or tax advice.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
This content is written by Vincent Ganne for Swissquote.
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only and does not constitute investment, legal or tax advice.
This content is intended for individuals who are familiar with financial markets and instruments and is for information purposes only and does not constitute investment, legal or tax advice.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.