SP500 continues to pull back as traders take some profits off the table near the yearly highs. Today’s pullback is driven by Basic Material and Energy stocks, which have found themselves under pressure amid a sell-off in commodity markets. China’s rate cuts were not as aggressive as traders expected, which served as an additional bearish catalyst for SP500. In the U.S., Building Permits and Housing Starts exceeded analyst expectations but did not provide any support to major indices.
The current pullback looks healthy as it pushed RSI back into the moderate territory. Interestingly, the 50 EMA at 4368 served as a local support level for SP500, although the main support area is located in the 4335 – 4350 range.
NASDAQ is currently trying to gain some upside momentum as traders use the pullback as an opportunity to establish long positions. Treasury yields are moving lower, which is bullish for the yield-sensitive tech stocks.
NASDAQ faced resistance in the 15,200 – 15,300 area, so it will need to get above 15,300 to continue its upside move. RSI is in the moderate territory, so there is plenty of room to gain additional momentum in case the right catalysts emerge.
Dow Jones
Dow Jones pulled back from recent highs as traders waited for additional catalysts that could push Dow Jones above the strong resistance area.
This resistance area served as a major obstacle for the bulls back in December 2022. In February 2023, Dow Jones made another attempt to climb above this area, but this attempt faced strong resistance. At this point, it looks that Dow Jones will need strong catalysts to climb above the 34,500 level.
For a look at all of today’s economic events, check out our economic calendar.