The market is growing emotional

26 thg 4

Yesterday’s financial print in the United States revealed a notable decrease in the GDP growth rate on a quarterly basis, coming down from 3.4% in 4Q23 to only 1.6% in 1Q24. This figure was well below market expectations of 2.5%, which spooked investors and led to a sudden drop across U.S. stock market indices. Nevertheless, by the market close, the SPX recovered all of its losses and staged a rally following the announcement of Alphabet and Microsoft’s earnings in the aftermarket. Both companies reported good results, seeing revenues and net income rise by significant percentages on an annual basis. Amid Alphabet’s plans to conduct a share buyback worth $70 billion and pay the first dividend ever to its investors, the company’s shares rose by more than 12%. Meanwhile, the reaction to Microsoft’s results was more subdued, with shares soaring slightly more than 2%.

However, despite stocks soaring after the closing bell, the continuous S&P 500 E-mini Futures showed that the price failed to break above the 20-day and the 50-day SMA, which just recently produced a bearish crossover; both of these moving averages continue to act as important resistance levels. In addition to that, although RSI, MACD, and Stochastic reversed to the upside on the daily chart (after the preceding weakness in stocks), they are not necessarily outright bullish yet. The overall picture is mixed.

Illustration 1.01

Illustration 1.01 depicts the 1-minute chart of the ES1! (S&P 500 E-mini Futures). Yellow arrows highlight the time of financial print release and earnings announcement.

Illustration 1.02

The illustration above shows the daily graph of the ES1! (S&P 500 E-mini Futures) and two simple moving averages, the 20-day SMA and the 50-day SMA. The yellow arrow indicates a bearish crossover between the 20-day SMA and 50-day SMA, a typically bearish sign. One interesting thing to note here is that despite the broader market rising after the big earnings announcement after the closing bell, the ES1! has not broken above the mentioned moving averages.

Technical analysis gauge
Daily time frame = Bearish (turning neutral)
Weekly time frame = Bearish
*The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of multiple indicators.

Please feel free to express your ideas and thoughts in the comment section.

DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor or any other entity. Your own due diligence is highly advised before entering a trade.

27 thg 4

Ghi chú

Pennsylvania regulators seized troubled regional bank Republic First Bancorp yesterday evening.