Economic Announcements:

• 3:00 PM: Michigan Consumer Sentiment Index

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Corporate Earnings:

• Carnival Corp (CCL)

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S&P 500 Analysis:

VPOC: 6526.25
VVA: 6519.75-6594.50
High-Low: 6517-6647
PP: 6660
Open: 6546.75
Vix: 26.09

Yesterday, the S&P 500 opened at 6629 in a bearish imbalance below the previous day’s value area. Despite two attempts, the price failed to re-enter the value area. Sellers then took control for the entire morning, finishing at the 6580-6585 support level before the US open.

At the US open, buyers attempted to take control by pushing the price back to the previous day’s low of 6616, but they were countered by sellers. From that point on, sellers took control and did not relinquish it for the rest of the day. The price closed around 6525.

In post-market trading, a massive green candle with a long upper wick can be observed, due to Iran’s request for an additional delay. Trump is reportedly suspending strikes until April 6.

This morning, the US index opened in Zone 1 at 6546, just below the 6550-6558 resistance zone. After several attempts, the price broke through this resistance with a strong bullish push. Aggressive sellers tried to counter this move, but the buying pressure was stronger. It remains to be seen if this bullish momentum will continue, especially as the index is once again below its 200-day moving average.

Regarding options, we still have our put wall at 6500, as well as two important levels at 6550 and 6600. On the call side, the largest levels are at 6800 and 7000.

Today, we will have the Michigan Consumer Sentiment Index, which will provide an indication of household morale.

Scenario 1 🟡: Upon rejection of the 6580-6585 resistance zone, the price could consolidate between this zone and the 6500-6520 support zone, which also corresponds to the previous day’s low and VVAL.

Scenario 2 🟢: Upon a breakout of the 6580-6585 resistance zone, the price could move upward to target the previous day’s VVAH at 6594, followed by the 6600-6610 resistance zone, and then the previous day’s high at 6647.

Scenario 3 🔴: Upon a breakdown of the 6500-6520 support zone, the price could continue its decline and target the 6445-6460 support zone.

Key Levels:

• 6685-6695 (Resistance Zone)
• 6650-6655 (Resistance Zone)
• 6647 (Previous Day’s High)
• 6600-6610 (Resistance Zone)
• 6580-6585 (Resistance Zone)
• 6550-6558 (Support Zone)
• 6500-6520 (Support Zone + VVAL-1 6519 + Previous Day’s Low 6517)
• 6445-6460 (Support zone)

Stock Market Slump

Major US stock indices, including the Dow Jones, S&P 500, and Nasdaq, all recorded significant declines as fears of military escalation led to massive equity sell-offs.

Impact of the Iran War

• Peace Plan Rejection: Iran has officially rejected the 15-point US proposal, calling it “unfair.”
• Regional Threats: Concerns are mounting regarding potential strikes on infrastructure in Dubai and Kuwait.
• Delay: Trump grants Iran an additional delay, stating he will postpone strikes on energy facilities until April 6.

Inflation and Bond Yields

Treasury yields rose, reflecting persistent concerns about inflation, exacerbated by rising energy prices.

Gold and Dollar

The price of gold fell, partly due to the strength of the dollar, which benefited from its safe-haven status during times of uncertainty. Expectations of an interest rate hike also weighed on the gold market.

Economic Forecasts

• Forecasts for the University of Michigan Consumer Sentiment Index for March indicate a slight decline, from 55.5 to 54. Speeches from Federal Reserve officials are expected, which could influence market expectations.
• Central Banks: Several Fed officials (Cook, Jefferson, Logan, Barr) are scheduled to speak soon.

Corporate Movements

Notable news includes the merger between Equitable and Corebridge, which will create an insurance giant, and the drop in Meta shares following concerning legal verdicts.

US Labor Market / Economic Resilience: Employment remains steady, the economy holds firm.

Weekly Unemployment Claims:

• Actual: 210K
• Forecast: 211K
• Previous: 205K

Regular Unemployment Benefit Recipients:

• Actual: 1,819K
• Forecast: 1860K
• Previous: 1,851K

-> The Finding: Employment figures are better than expected. Not only are there slightly fewer new unemployment benefit claims than anticipated, but more importantly, the number of regular beneficiaries is falling much faster than expected. This proves that the US labor market is in great shape and that those who lose their jobs are finding new ones very quickly.

Summary

• The Economy Shows Resilience: Such a tight and solid labor market means that consumers will continue to spend. There is no wave of layoffs on the horizon.
• Impact for the FED: Strong employment = upward pressure on wages = risk of persistent inflation. With figures like these, the Fed is under no urgency to lower interest rates. It has every opportunity to remain restrictive.