SPY Technical Analysis & Weekly Stock Market Update


Chart done on hourly timeframe. Markets are coming back from a very eventful week that shed light on the labor market in the United States and reminded everyone where The Fed stood on interest rates.  In his testimony to Congress, Federal Reserve Chairman Jerome Powell reinforced The Fed’s stance on inflation, stating once again that they’re looking for more economic data to ensure inflation stays down before lowering interest rates. Last week’s labor market data showed just how strong the U.S. employment rate is, another reason why The Fed is no rush to cut interest rates. The debate on monetary policy will soon have an answer come the FOMC later this month, but first this week’s big focus is the CPI report. The consumer and producer price indexes have been a large influence on markets since inflation became a highlight, so markets will be nervous ahead of these reports, especially after The Fed’s comments last week. 

Technical analysis:

Friday’s profit taking was substantial and may reflected the strongest selling days markets have seen in a while. The pull back may have marked the start of a multi-week consolidation heading into the next two weeks as markets prep for the FOMC meeting. General trend is still bullish, but we’re staying cautious to both sides.