Chart of the Day! – 30th August 2022

S&P500 – Market Tumbles after Jerome Powell’s comments on Friday on battling with inflation to bring it down to the 2% target.

Chart Analysis

After the hawkish comments from the Federal Reserve Chairman further interest rate hikes seems imminent, probably another 0.75 basis points increase in the next FOMC meeting. Investors are already pricing in this possibility, and it was reflected in the selloff on Friday and the continued weakness and volatility this week.  The chart shows the index fell from the 20-day SMA resistance to drop by more than 140 points on Friday and below the Pivot on the chart at 4060. The next support is at around 4000 points also the confluence points of 50 Day SMA Red line coming from the bottom might offer support and hold the prices briefly. It seems from that point on the fall of the index would continue towards the trend line support at 3962 also the Key Support level on the chart.

Check our Trade Insights below on US500 to integrate into your own analysis.

• Resistance Zone: 4230 to 4260
• Key Resistance: 4157
• Major Pivot Point: 4060
• Key Support Level: 3962
• Support Zone: 3900 to 3870
• 200 Day SMA – Green Line
• 50 Day SMA – Red Line
• 20 Day SMA – Blue Line

Daily Chart Directional bias - 1 Week

Trade Insights

US500 Chart shows - Possible Short positions below the Apex point at 4036 with the first target of S1 Support at 4004. And after the index drops below S1 then further short positions to next S2 Key support level at 3962 and then further test of the S3 Support zone at 3900 to 3870 if S2 is broken.

Possible Entry for Short Selling trades below the Apex point at 4036.

Potential first take profit could be at – S1 - 4004

Potential second take profit could be at – S2 - 3962

Potential third take profit could be at – S3 - 3900.

Alternatively, US500 Chart shows - viable Long Positions from 4036 with the first possible target of the Pivot point 4060 or R1. Then after confirmation above the Pivot point the next target of R2 at 4103 and then further test of Key Resistance level or R3 at 4157.

Possible entry of Long Trades above the Pivot Apex point at 4036 on the chart. 

Potential first take profit could be at – R1 4060

Potential second take profit could be at – R2 4103

Potential Third take profit could be at – R3 4157