Hammering Out Hopes: S&P 500's Potential Reversal Signal
26 September 2023
Hello traders, welcome to another vibrant Tuesday. We've ushered in this week with a shimmer of intrigue as indices seem to be flirting with a potential reversal. S&P 500 painted a rather encouraging picture yesterday, forming a definitive hammer candlestick after witnessing four uninterrupted bearish days. Could this be a beacon of renewed hope? Well, we might want to hold onto our hats before jumping to conclusions, especially considering the less than stellar performance during the Asian trading session.
Dow Jones attempted a similar reversal dance, manifesting a hammer-like Doji. However, as Europe's dawn approaches and futures begin to recede, one can't help but feel a twinge of apprehension. The DAX isn't inspiring much confidence either. Hovering precariously close to its mid-term troughs, it appears to be signaling that hopes of a bullish resurgence might be a tad premature.
Shifting our gaze to the foreign exchange market, yesterday was undoubtedly a triumphant day for the Canadian dollar, New Zealand dollar, and the U.S. dollar - all flexing their muscles. Meanwhile, the Swiss franc and the Euro trailed, seemingly in a bit of a slump. As Tuesday unfolds, the American dollar's might is palpable. EURUSD continues its descent within its bearish channel, lingering near mid-term lows. In a similar vein, both USDJPY and USDCHF are hovering around long-term peaks, with the latter piercing through the pivotal 0.91 resistance level, consequently firing up a buy signal.
On the commodities front, precious metals appear to be on a downhill slide, with the spotlight on silver which seems eager to relinquish its mid-September gains. And let's not leave oil out of the mix. The "black gold" too is in a corrective phase, adding another layer to today's complex tapestry of market dynamics.
Finally, a peek into today's macroeconomic calendar suggests a rather subdued affair. On deck, we have the U.S. CB Consumer Confidence, anticipated to dial down to 105.5, and the New Home Sales, projected at a round figure of 700,000. With a relatively quiet calendar, it's evident that all eyes and ears will be trained on the indices. The million-dollar question? Will Monday's flicker of reversal metamorphose into a more sustained rally or was it just a fleeting mirage? As always, the market holds the cards close to its chest, leaving us in thrilling suspense. Happy trading!