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S&P 500 Index: Bulls Struggling to Save 3283 From Collapse As Fed Chair Speaks

The S&P 500 index is enduring a choppy start to the trading session, as investors juggle positions in response to the initial jobless claims data and the upcoming speech by US Fed Chair Jerome Powell. 

Data released by the US Department of Labour shows that the initial jobless claims came in at 745K, which was less than the 758K predicted and slightly higher than the higher revision of 736K for last week. Continuing jobless claims hit new one-year lows, continuing the gradual retreat that shows that more people are getting out of the bracket. Analysts at Wells Fargo believe that initial jobless claims are only this high as previously missed filings are now being captured after the cold snap of last month. They are predicting that Friday’s NFP will show a rise in job growth.

The initial jobless claims did not do much to spur bullish action on the S&P 500 index, which opened lower before a jostle between bears and bulls put the price into a state of whipsaws. Markets seem to be waiting for the Fed Chair’s comments at the top of the hour before taking definitive positions. 

Technical Outlook for S&P 500 Index

The support at 3823.9 is currently at risk of a breakdown, and only a close above this level will save this level. If the bulls can retake the momentum, then we could see further upside that tackles the resistance at 3870.0. Above this level, the all-time high at 3950.4 remains the barrier that bulls must surmount to continue the surge towards new highs, which has 4005 as its potential focus point. 

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On the flip side, a breakdown of 3823.9 allows bears to force down the price towards 3721.2, with 3645.4 and 3588.6 serving as additional downside targets. A potential pitstop exists at 3700, where the low of 5 January and the high of 4 December 2020 had some previous interaction.  

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S&P 500 Daily Chart

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