The S&P500 is Poised for a Decent Bounce Amid Improving Sentiment on Many Fronts

Stock markets have been retreating since the beginning of this year as inflation continued to rise and central banks showed a hawkish stance, which seems to have been the steepest period of rate hikes in history, leading to negative sentiment. But things seem to be improving as central banks slow down and inflation begins to cool.

When trading in the USA remember that there is no concept of cheap/expensive in the market. Beginners and those who are far from trading often use the words “expensive” and “cheap. Forget about these words. Maybe, in life, those words can really make sense. There are no such concepts in trading. Every asset is worth as much as the market has valued it at the moment. On how to choose a broker, read more.

 U.S. Inflation Data

The softer U.S. inflation data on Thursday has already been a major catalyst for a staggering rise in stock markets. But the confirmation that China is indeed easing its zero-rate policy is also a significant boost. The idea of easing has been in the air for more than a week, but China can do so much to deny that it has no choice but to turn the other way.

The S&P 500 is now up 25 points, or 0.7%, which is a good finish for risk-taking ahead of European trading. Oil is also up 2.5% for the day, above $89, rising above $90 before closing.

So, things are looking pretty good right now as long as the Fed speakers don’t come in and ruin the party. but I mean, this is a market that has been desperately hoping for things to go their way for the last few months. And suddenly, suddenly, it’s got quite a bit of support from the events. That kind of optimism can be hard to shake off. Weekly SPX Index Chart – The 200-day moving average has held up as support.

The rebound has already begun

On the weekly chart, we see that:

• The 20-day moving average provided support during the uptrend of the previous two years. But that moving average was broken.
• The 50-day moving average became resistance.
• The 200-day moving average has contained the decline, and now we are seeing a bounce from that moving average.

The first target will be the 50-day and 100-day moving averages, which have converged together, so buyers must break above those moving averages to continue the bullish momentum. To take advantage of this opportunity, keep a close eye on the current news, and the latest statements from leading politicians, and analyze the chart and the behaviour of the markets.