Connect with us

Hi, what are you looking for?


Fear and greed index points to more S&P 500 upside

The S&P 500 index has drifted drifted downwards after it tested the important resistance point at $4,181. It retreated to a low of $4,095 after the latest interest rate decision by the Federal Reserve and as region banks continued collapsing.

Fed and regional banks

The biggest stocks news this week was the monetary policy meeting by the Federal Open Market Committe that concluded on Wednesday. In that meeting, the committee unanimously decided to hike interest rates by 0.25%. That was a surprise since most analysts were expecting a few members to pause.

Watch here:

The other big news was the collapse of First Republic Bank on Monday. In a statement, the FDIC announced that it was seizing the bank and then quickly selling to JP Morgan. Sadly, it seems like other banks like Western Alliance and PacWest are on the verge.

Despite of all this, the fear and greed index has moved from the neutral point of 51 on Wednesday to the greed area of 53. In most periods, the S&P 500 index tends to do well when investors are greedy. This is a sign that the S&P 500 and its associated ETFs like the SPY could be ripe for a bullish breakout.

The market momentum, which looks at the S&P 500 performance against the 125-day moving average, has moved to the greed zone. The same is true with the stock price strength, put and call options, and safe haven demand. The only sub-index in the red is junk bond demand.

Therefore, the S&P 500 index will today react to the decision of the Federal Reserve. As my colleague wrote here, there is a likelihood that the Fed is bluffing by maintaining a hawkish tone. The other key catalyst will be the latest Apple earnings.

S&P 500 index technical analysis

S&P 500 chart by TradingView

On the daily chart, we see that the S&P 500 index has been stuck below the important resistance level at $4,181. This was the highest point on February 2 and May 2. As such, it is clear why the index is struggling to move above this level. This pattern can be seen as a double-top whose neckline is at $3,808. It is also at the 50% retracement level.

Therefore, I believe that the index will soon have a bullish breakout, with the next point to watch being at $4,400. A drop below the support at $4,000 will invalidate the bullish view.

The post Fear and greed index points to more S&P 500 upside appeared first on Invezz.

Enter Your Information Below To Receive Free Trading Ideas, Latest News And Articles.

    Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

    You May Also Like

    Latest News

    As the United States continues to grapple with the ongoing immigration crisis, the House and Senate have found themselves at odds over how to...

    Latest News

    As the world continues to grapple with the COVID-19 pandemic, the global economy is facing unprecedented challenges. In the United States, President Joe Biden...

    Latest News

    Rep. Jennifer Wexton (D-Va.) announced on Tuesday that she has been diagnosed with Parkinson’s Disease. “If there’s one thing that Democrats and Republicans can...

    Latest News

    After Dianne Feinstein announced she’d contracted the shingles in early March, her staff said she planned to return to the Senate within a matter...

    Disclaimer:, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2023 All Rights Reserved.