S&P 500 Forecast: US Blockade Jitters and Goldman Miss Stifle the 7,000 Rebound for SPX

Wall Street is on edge. Peace talks collapsed over the weekend, and the U.S. Navy is now blocking Iranian ports. Crude oil surged over 7% today. I’m watching the $100 level on Brent crude like a hawk because it’s the exact psychological trigger that forces central banks into a hawkish corner. Goldman Sachs didn’t help matters. They beat profit estimates, but the underlying revenue mix was messy, and the market punished them for it. We’re back in a “sell the news” regime. Inflation is a ghost that won’t stop haunting us, and with gas prices at three-year highs, the Fed is effectively boxed in. But, markets need a wall of worry to climb. And this, I would say, is a huge wall of worry. Climb baby climb for the S&P 500 Index.

Weekly Supertrend Signals Macro Resistance

The long-term picture has shifted. After a staggering run toward 7,015, the Index was struggling to find its footing and pulled back towards 6,280. However, there was an end of March rebound which continued into April which caused a positive flip on the short-term Supertrend indicator. Buyers are still putting up a fight, with the next level to watch back at the 7,015 level.

S&P 500 Weekly Chart Showing Resistance at the Supertrend Ceiling

Daily 21-EMA Remains the Road

Bulls are back in it. The daily 21-EMA is acting like a recovery road towards all time highs. The RSI is hovering right at 60. It’s not overbought so there’s some room to go before the final shot. We need to stay above the 21-EMA and trod carefully towards the previous resistance levels. Let the positive momentum keep building for the bulls.

Daily S&P 500 chart Highlighting 21-EMA Support

Daily S&P 500 chart showing 21-EMA support and the latest recovery structure. Source: TradingView

Bullish Percent Index Highlights Breadth Decay

Market Breadth can act as the third eye. The S&P 500 Bullish Percent Index ($BPSPX) is currently at 57.60 and crossed above 50 late last week which is a very bullish signal. Based on data over the last 30 years, a cross above 50 on the $BPSPX would lead to a median return of 19.95% in a year’s time. The likelihood of this happening is 69%. That’s something you just can’t ignore.

$BPSPX Showing a Crossover Above 50

Renko Bricks Signal Intraday Exhaustion

The 20-brick Renko view is undeniably bullish. We just witnessed a “Buy” signal from the Supertrend at 6,462.2, and price is now trading at 6,820, well above the 500 SMA. This is a breakout! Finally after the March volatility. The RSI on this timeframe is a healthy 63.98 or thereabouts., and the Z-Score at 0.6 indicates we have plenty of room to run before the rally becomes overextended. The series of green bricks is unbroken, highlighting a strong, algorithmic bid that’s mopping up any geopolitical selling pressure.

20-Brick Renko Showing a Definitive Move & Fresh Buy Signal

SPX Renko chart with 20-brick size and Z-Score oscillator Source: TradingView

S&P 500 Trade Parameters

Current trend direction: Neutral.

Bias: Positive.

Key support levels: 6,310, 6,500.

Key resistance levels: 7,015, 7,100.

Medium Term Path: I’m betting on the bulls. Despite the oil surge, the technical reclaim of the daily 21-EMA and the 500 SMA on the Renko chart suggests that the 6,816 level is becoming a solid base. I expect a grind higher through the rest of the month, targeting a re-test of the 7,014 all-time high. The market has ignored the blockade headlines, focusing instead on strong corporate earnings and the seasonally bullish April window. Perhaps buy the dips until the 500 SMA breaks.