S&P 500 Futures Rise Amid Fed Rate Cut Speculation
Investor concerns over prolonged higher interest rates weighed on the S&P 500 last week. Federal Reserve Chair Jerome Powell emphasized the need for concrete evidence of inflation nearing the 2% target before considering rate adjustments. This cautious stance has led to a downward revision in market expectations for rate cuts at the Fed’s June meeting.
Despite short-term volatility, the S&P 500 is displaying signs of a bullish rotation to continue with its surge this year.
Trend Continuation:
- With the price action sitting in a tight ascending channel, trading in the direction of the trend would be ideal for now, as there are little to no bearish signals we can take.
Support Levels:
- The first level of support lies at the 50-day SMA near $5123. The next is at $4814, which is the previous all time high.
Technical Indicators:
- The RSI, although not in overbought territory, indicates strong momentum, which aligns with our bullish outlook.
- The recent mild retracement in the price presents an opportunity to join the trend with the expectation of a continuation.
Trade Strategy:
- Long Opportunity: Consider long positions on dips towards the 50-day SMA, with stop-loss orders placed below the SMA or previous swing lows to protect capital.
