SPY Technical Analysis & Weekly Stock Market Update


All time highs have become a routine occurrence in 2024 thanks to optimism around artificial intelligence and the growth it offers. Semiconductor companies have especially been in the spotlight as their earnings exponentially exceed expectations as chip demand grows. Last week’s earnings report from Nvidia fueled buying confidence and propelled markets higher, but there will be another major test this week from the economic front. The PCE report, which is The Fed’s preferred inflation gauge, will be released on Thursday and investors are eager to see the results it brings. January’s CPI report reflected higher inflation than expected, so there’s a good chance we’ll see the same result on the PCE report. The market rally we’ve seen since October has been fueled by the idea of a March interest rate cut, but based on the comments The Feds have made in recent speeches, it doesn’t seem like they will be lowering rates in their March FOMC meeting due to lingering inflation numbers. 

Despite the persistent inflation, markets shrugged off the warnings signals and continued their push. The most recent example was the CPI report, where The Dow dropped nearly 800 points after the release, but buyers quickly stepped in and pushed stocks higher. Analysts are already expecting a rise in inflation for the PCE report this week, so the big question is will buyers once again come to the rescue. 

Technical analysis:

SPY reached a high of 510.13 last week before getting rejected, which is our main resistance in focus coming into this week. Buyers need a move above that level for bullish continuation into all time highs. To the downside, we’ve placed a support at 502.80, a move below that can begin a gap fill to 497.50.