SPX eyes $4,600. But can it make there?

20 июл. 2023 г.

Yesterday, after the market close, International Business Machines, Netflix, and Tesla unveiled their earnings for the second quarter of 2023. Investors did not take this news positively, and shares of all three companies slumped in response. Today, in the pre-market, Netflix is down more than 8%, Tesla more than 4%, and IBM approximately 1%. More U.S. corporations are scheduled to report their earnings today, including Abbott Laboratories, Johnson & Johnson, and Philip Morris. In addition to that, today, we can anticipate crucial economic data, including updates on initial jobless claims and the Philadelphia FED Manufacturing Index. In regard to technical indicators, RSI traveled into the overbought territory on the daily chart while MACD and Stochastic continued to develop bullish structures. The price deviated too far from the 20-day SMA, which makes a case for a slight pullback before SPX continues higher. We will update our thoughts as the earnings season progresses further.

Illustration 1.01

Illustration 1.01 shows the daily chart of SPX and RSI. Yellow arrows indicate the first divergence between the price and RSI. Now, we will watch whether RSI can overtake its peak on 15th June 2023. If RSI crosses below 70 points, it will be bearish.

Technical analysis gauge
Daily time frame = Bullish
Weekly time frame = Bullish
*The gauge does not necessarily indicate where the market will head. Instead, it reflects the constellation of RSI, MACD, Stochastic, DM+-, ADX, and moving averages.

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DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not be a basis for taking any trade action by an individual investor. Therefore, your own due diligence is highly advised before entering a trade.