The S&P 500 at the Dollar’s Edge
Economic Announcements:
- 3:00 PM: Construction Spending
Corporate Earnings:
N/A
S&P 500 Analysis:
VPOC: 6599
VVA: 6551.75-6622.25
High-Low: 6523.75-6685.50
PP: 6560
Open: 6546.75 (Zone 2)
Vix: 27.02
On Friday, the S&P 500 opened above the 6650-6665 support zone and the previous day’s value area. It traded sideways for much of the morning, attempting to re-enter the previous day’s value area around 8:00 AM, which was rejected. The second attempt at the European open succeeded, and sellers pushed the price down to the 6600-6610 support zone and the previous day’s low at 6611. The price then consolidated within the value area until the US open.
At the US open, sellers took control and attempted to push the price below the 6600-6610 support zone. After a long battle at this support, sellers gained the upper hand and drove the price down to the 6525-6533 support zone. Late in the session, the price managed to bounce back to close above the 6550-6558 support, ending near 6570.
This morning, the US index opened with a bearish gap in Zone 2 at 6546.75, below Friday’s low and under the 6525-6558 resistance zone. The price is currently moving sideways on the resistance zone and above Friday’s low, having made several attempts to re-enter Friday’s value area, all of which were rejected.
For now, the trend is clearly bearish and volumes are above average. The VIX index has risen further and is now above 27. Needless to say, caution is advised today, and the evolution of the conflict in Iran must be closely monitored.
Regarding options, we have a large Put wall at 6500, while the main Call interests are located at 6800.
Today, there are no notable economic data releases, apart from construction spending at 3:00 PM, which is unlikely to significantly influence the markets.
Scenario 1 🟡: Upon rejection at 6500, the price could consolidate between this level and the 6525-6558 resistance zone.
Scenario 2 🔴: Upon a break below 6500, the price could continue its decline toward the 6445-6465 support zone and then 6400.
Scenario 3 🟢: Upon a reversal and break above the 6525-6558 resistance zone, the price could target the 6600-6610 resistance zone, followed by Friday’s value area between 6621 and 6661.
Zones of Interest:
- 6685-6695 (Resistance Zone + Friday’s High)
- 6600-6610 (Resistance Zone)
- 6525-6558 (Resistance Zone + VVAL-1 6551.75 + Friday’s Low 6523.75 + Open 6546.75)
- 6445-6462 (Support Zone)
- 6240-6260 (Support Zone)
60-Second Clock
Market Trends
Wall Street experienced a sharp decline, with notable losses for major companies like Nvidia and Microsoft, as persistent tensions in the Middle East fuel inflationary concerns. The S&P 500 fell 1.51%, the Nasdaq 2.01%, and the Dow Jones 0.96%.
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Inflation and Interest Rates
Treasury bond yields rose, reflecting inflation fears linked to rising oil prices. The article highlights that the situation in the Middle East could prolong economic tensions, prompting investors to anticipate interest rate hikes rather than cuts.
Upcoming Economic Data
The US Census Bureau is set to release January construction spending data, expected to rise by 0.1%. Other releases include activity indices and labor costs, which are also expected to influence market expectations.
Key Events
CERAWeek 2026, a major energy and environment event, begins, bringing together global leaders to discuss challenges related to the climate crisis.
Impact of Geopolitical Conflicts
The escalation of the conflict between the United States and Iran is impacting markets, with forecasts of rising oil prices and implications for global energy markets. Analysts express concerns regarding the prolonged duration of this conflict.
Corporate Reactions
Companies like FedEx and Super Micro are facing challenges due to economic uncertainties and geopolitical tensions, impacting their financial forecasts.
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