S&P 500 Index Set for Higher Open On Positive Pre-Bell Earnings

The S&P 500 index closed 0.84% lower in Monday’s trading, truncating the two-day winning streak the index attained as it seeks to push off recent lows. However, US stock futures are mostly higher after rebounding from initial losses brought on by news of Apple’s reported hiring freeze.

S&P 500 index futures are currently up by 0.7% ahead of a new batch of earnings results. July means it is earnings season once more. Johnson & Johnson, Lockheed Martin and Haliburton are among the companies expected to release their earnings. 

Johnson & Johnson is a tad higher in premarket trading after it registered earnings per share of $2.59, which marginally beat the market expectation of $2.55. Revenue came in at $24.02 billion, more than the $23.82 billion that analysts had predicted. However, traders did not appear impressed by the earnings, which only beat estimates by 1.63% after last quarter’s 4.08% earnings beat.

Haliburton fared better with an earnings beat of 9.48% after it reported earnings per share of 49 cents versus the market expectation of 45 cents for the second quarter of 2022. Revenue came in at $5.07 billion, more than the $4.71 billion projection. More earnings results are expected this week. 

A technical look at the daily chart indicates that the attempt to break the neckline and complete the potential double bottom pattern failed after the bears rejected this move at 3906. If the bulls can drive the completion of this pattern, the upside move would serve as a retracement rally within the downtrend. This may provide new rally-sell opportunities. This outlook will gain support if the Fed hikes interest rates beyond market expectations in its 28 July decision. 

S&P 500 Index Outlook

The 3906 resistance remains the level to beat for the bulls, as it forms the neckline of the evolving double bottom pattern. This neckline has to be broken from a bounce on the 3816 support (20 May and 15 July 2022 highs). The measured move’s completion point lies at the 4062 resistance (10 May high).

This move must degrade the resistance barrier at the 4000 psychological barrier to come to fruition. Therefore, 4122 (8 June high) and 4168 (31 May and 6 June 2022 highs) form additional targets for the bulls.

On the flip side, a decline below the 3816 support puts the bears on the path toward the 3726 price pivot, which serves as the low of price action seen on 15 June 2022 and 14 July 2022. The 3638 price trough that forms the initial bottom seen on 15 June 2022 is another harvest point for the bears. Finally, 3544 (9 October 2020 low) comes into the picture if the bears degrade to 3638.

SP 500 Daily Chart