Economic Announcements:

• 2:45 PM: PMI

(Read more)

Corporate Earnings:

N/A

(Read more)

S&P 500 Analysis:

VPOC: 6635
VVA: 6626-6688.50
High-Low: 6483.50-6748
PP: 6620
Open: 6635 (Zone 1)
Vix: 25.24

Yesterday, the S&P 500 opened at 6546 with a bearish gap, below Friday’s value area and on the 6525-6558 support zone. The price was bearish after several attempts to re-enter the value area. The price settled on the 6495-6505 support before Trump declared that constructive contacts had been made with Iran.

The price then rose very sharply to the 6740-6745 resistance zone before returning to Friday’s highs at 6685. The price then corrected slightly to finally close below the weekly VPOC at 6630.

During its rise, the price formed a single print between 6527 and 6625. It has already been filled down to 6581, but this level could form a natural support in the event of a decline.

This morning, the US index opens in Zone 1 at 6635 and is rather bearish. The price has moved out of the previous day’s value area and has broken the 6600-6610 support zone. The market is quite volatile, with a VIX above 25, and we are seeing sudden explosive movements; caution is therefore advised.

Regarding options, we have a large Put interest level at 6500. The next interesting Call zones are around 6800.

Today, we will have PMI data that could influence prices, and the situation in Iran could also have a strong impact on the markets following Trump’s statements.

Scenario 1 🟡: Upon rejection at the previous day’s VVAL at 6626 and at the open at 6635, the price could consolidate in the 6635 area and the 6525-6558 support zone.

Scenario 2 🔴: Upon a break of the 6525-6558 support zone, the price could target the previous day’s low around 6483.

Scenario 3 🟢: Upon a break of the open at 6635 and the 6685-6695 resistance zone, the price could target the previous day’s high at 6748.

Key Levels:

• 6771-6777 (Resistance zone)
• 6748 (Previous day’s high)
• 6685-6695 (Resistance Zone + VVAH-1)
• 6635 (VPOC + Open)
• 6600-6610 (Resistance Zone)
• 6483 (Previous day’s low)
• 6525-6558 (Support Zone)

Stock Market

Stocks rose, with the Dow Jones up 1.38%, the S&P 500 up 1.15%, and the Nasdaq up 1.38%. This rise was fueled by falling oil prices after President Trump announced a postponement of military strikes against Iran, following discussions deemed “productive.”

Economy

Treasury yields decreased, while the dollar weakened against major currencies. Upcoming economic data includes labor productivity and unit labor costs, with increases forecast.

Upcoming Events

• PMI: Purchasing Managers’ Indices are expected this Tuesday, March 24, and will be crucial for assessing the real impact of the energy shock on economic activity.
• Trump Ultimatum: Although a 5-day postponement of strikes has been mentioned, the deadline for this informal “ceasefire” falls during the weekend, a period historically conducive to escalations by the current administration.

International Context

The situation in the Middle East, marked by tensions between the United States and Iran, is described as more serious than the oil shocks of the 1970s. The director of the International Energy Agency expressed concerns about the potential impact on energy markets.

Opinions and Analysis

Investors appear to anticipate a prolonged conflict in the Middle East, leading them to seek refuge in safer assets. Additionally, BlackRock CEO Larry Fink warned that the rise of artificial intelligence could exacerbate wealth inequality.

Currency Reaction

• US Dollar: The greenback remains generally supported by its safe-haven status and interest rate bets, although it experienced a temporary 1% decline following Trump’s announcements.
• EUR/USD: The pair fluctuated violently between 1.1490 and 1.1615, before stabilizing around 1.1560.
• Yen: The Japanese currency remains under pressure, dependent on the country’s underlying inflation signals.

Construction: Unexpected slowdown in US construction sites

Construction Spending (Monthly):

• Actual: -0.3%
• Forecast: 0.1%
• Previous: 0.8%

-> Negative surprise. The indicator plunges into the red and misses the consensus, marking a sharp halt after the strong growth of the previous month. Construction players are abruptly slowing down their investments.

Summary

The observation: Continued high interest rates and material costs are finally catching up with the sector. Developers are putting projects on hold.
Impact for the FED: This slowdown proves that the FED’s strict policy is cooling the real economy.