SPY Technical Analysis & Weekly Stock Market Update


Chart done on hourly timeframe. The Federal Reserve sent markets higher last week after announcing their plan to lower interest rates by 75 basis point in 2024. The unexpected announcement caused a rally in global equities as it signaled that The Fed have “defeated” inflation and were successful in their economic soft-landing plan. Last week’s CPI data reinforced their decision by showing inflation reading at 3.1% compared to 3.2% the month prior. This week’s PCE report, which is The Fed’s preferred inflation gauge, will also give markets an update on inflation. October’s reading was 3.0%, so a reading below 3.0% for November will help boost markets as it will be closer to The Fed’s overall target of 2.0%. Retail sales also bounced back on last week’s report, showing a positive 0.3 % jump compared to -0.2% in the previous month. Retail sales are the backbone of the U.S. economy so the positive reading only added more fuel to the positive market sentiment. This week’s Consumer Sentiment Report can potentially build on that if it comes in higher than the previous month. 

Technical analysis:

Major indexes such as SPY closed out their seventh consecutive week of gains last week, leaving many to wonder if there’s enough gas left in the tank for a Santa Rally. The week before Christmas often leads markets higher, but we’ve also seen volume significantly drop ahead of holidays, and a volume decline at these highs will make it very hard to sustain a push. We’re coming into this week with a bullish outlook, but a careful approach. Our resistance in focus for SPY is 473.73, a breakout above that level is likely to send us to all time highs of 480.00+, but consider the holiday week, our outlook is through January for this target.