SPY Technical Analysis & Weekly Market Update

Weekly Market Update

The S&P reached a new high once again last week after the second FOMC meeting of the year came to an end. As expected, The Federal Reserves left interest rates unchanged and didn’t have any “surprises” in their remarks. The Fed stated that they still need to see more economic data that points to cooling inflation before they cut rates, if they cut rates too quickly, inflation may get out of control again. This week’s PCE Index will update markets on inflation, which will be the biggest catalyst to watch for; however the report is set to be released on Friday, which is a market holiday in observance of Good Friday. The PCE Index is The Fed’s preferred inflation gauge, so it will be watched closely despite the market closure, and its effects will likely be seen the following week. Last month’s PCE came in at 2.8%, on track to The Fed’s target of 2%. Apart from new inflation data, markets will also get the latest reading on consumer sentiment, which has been on the rise since November of last year, right around the same time markets started their bullish rally. Consumers are at the forefront of our economy, so how their feeling influences growth directly.  Last but not least, the second revision of Q4 GDP will be released this week. The last reading showed that growth decelerated in Q4 from Q3, but still read a positive 3.2%. Markets will want to see 3.2%+ to avoid any surprises. 

SPY Technical analysis:

SPY reached a high of 524.11 this morning before pulling back to close the week. The small pull back could likely be accredited to profit taking, but it wasn’t severe enough to suggest a reversal. However we do see a chance that SPY pulls back to start the week to retest 515.00-518.00 before pushing higher. The uptrend needs to be alleviated or it won’t be sustainable for long without a modest pullback. Buyers need a breakout about 524.11 for bullish continuation to 528.00-530.00.