Economic Announcements:

• 2:15 PM : ADP nonfarm employment change
• 3:45 PM : Services PMI
• 4:00 PM : ISM non-manufacturing PMI
• 4:30 PM : Crude oil inventories

Earnings Reports:

• Broadcom (AVGO)
• Brown-Forman (BFb)

Analysis:

VPOC : 6826.25
VVA : 6767.25-6850
High-Low : 6718.75-6886
PP: 6800
Open: 6813.25 (Zone 1)
VIX: 23.56

S&P 500 Trend: Overall Bearish Sentiment 🔴

Yesterday, the SP500 opened in the prior day’s value area, just below the 6883-6900 resistance zone. Sellers took control from the start of the morning and pushed price down to the 6771-6777 support zone. Price then moved sideways around this area before the US open.

At the Wall Street open, sellers were even stronger and managed to push price down to the 6715-6720 support zone. Buyers then stepped in to lift price back to the 6815-6830 resistance zone. The index closed around 6820.

The scenario is similar to the previous day, with an overall decline in price.
Volatility was very high yesterday, with VIX spikes above 28, resulting in sharp moves.

Today, the SP500 opens in Zone 1, in the middle of the prior day’s value area. Price is following the same pattern as yesterday, with sellers dominating the Asian session. Price tested the 6771-6777 support zone and is now trading between that area and the 6815-6830 resistance zone.

Overall sentiment remains bearish, and markets are still under pressure from oil, which reached a high around 78.
On the options board, we can see that investors are hedging to the downside, with a majority of puts.

This afternoon we will have the ADP nonfarm employment report, the non-manufacturing PMI, and crude oil inventories (which will be closely watched).

Scenario 1 🟡: On a rejection at the 6771-6777 support zone or at VVAL-1 at 6767, price could consolidate within the value area between 6767 and 6850.

Scenario 2 🔴: On a break of the 6771-6777 support and confirmation with a break of VVAL-1 at 6767, price could continue lower and target the 6715-6720 area.

Scenario 3 🟢: On a break of VVAH-1 at 6850 and confirmation with a break of the 6857-6866 resistance zone, price could rebound slightly and target the 6920-6930 area.

Zones of Interest:

• 6993-7000 (Resistance Zone)
• 6920-6930 (Resistance Zone)
• 6883-6900 (Resistance zone)
• 6857-6866 (Resistance zone)
• 6850 (VVAH-1)
• 6815-6830 (Resistance zone + VPOC-1 + Open 6813)
• 6771-6777 (Support Zone)
• 6767 (VVAL-1)
• 6715-6720 (Support zone + prior day low 6718)
• 6625-6640 (Support zone)

Market overview

• Wall Street ended lower, as investors worried about the conflict in the Middle East dragging on.
• Oil prices surged, while Treasury yields also climbed.

Impact on the dollar and gold

The dollar strengthened on inflation fears, which weighed on gold prices.

Upcoming Economic Data

• An ADP employment report is expected to show an increase of 50,000 jobs for February.
• Broadcom and Abercrombie & Fitch are expected to report positive results, while Bath & Body Works and Brown-Forman are expected to see a decline in revenue.

Reactions to the conflicts

• Geopolitical tensions have raised concerns about inflation and energy prices, affecting investor sentiment.
• Analysts note that the conflict could have lasting consequences for markets.

Company news

• Target’s new CEO plans to restore sales growth.
• Best Buy faces memory-cost challenges despite strong holiday performance.
• Several companies, including Paramount and Apple, are announcing significant changes to their operations.

Economic Outlook

• Analysts are questioning the effectiveness of traditional portfolios in an unstable market environment.
• The Fed is monitoring conflict-related inflation risks, while emphasizing the resilience of the US economy to shocks.