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S&P 500 Pulled Back Below 3960 In Choppy Trading

By:
Vladimir Zernov

NASDAQ Composite settled near the 11,075 level.

S&P 500

In this article:

Key Insights

  • S&P 500 is under minor pressure after the release of PPI and Consumer Sentiment data. 
  • Energy stocks are losing ground as WTI oil is testing new lows. 
  • Traders are afraid to make big moves ahead of the Fed Interest Rate Decision, which will be released on December 14. 

Traders Stay Cautious Ahead Of The Weekend

S&P 500 is losing some ground as traders are not ready for big moves ahead of the weekend.

Today, traders focused on the PPI data and the preliminary release of the Michigan Consumer Sentiment report.

PPI declined from 8.1% in October to 7.4% in November, while analysts expected that it would drop to 7.2%. Core PPI decreased from 6.7% to 6.2%, compared to analyst consensus of 5.9%. S&P 500 futures suffered a sell-off after the release of the PPI reports but quickly moved back to higher levels.

The Michigan Consumer Sentiment report also tested market sentiment as it showed that Consumer Sentiment improved from 56.8 in November to 59.1 in December. Rising Consumer Sentiment may lead to a more hawkish Fed, so the report could have put additional pressure on stocks. Interestingly, stock traders have mostly ignored this report.

Meanwhile, Treasury yields continued to rebound after the recent pullback. The yield of 10-year Treasuries managed to get above the 3.55% level and made an attempt to settle above 3.57%. Higher Treasury yields did not put any pressure on S&P 500 in today’s trading session.

Energy stocks were moving lower as WTI oil declined below the $71 level amid recession worries. Devon Energy, Halliburton, and Schlumberger were among the biggest losers in this market segment.

Tesla was up by 4% as some traders were ready to use the recent pullback to buy the stock near yearly lows.

S&P 500 Enjoys Strong Support In The 3915 – 3940 Area

S&P 500

S&P 500 gets strong support in the 3915 – 3940 area. Unless S&P 500 manages to settle below the 50 EMA, which is located near 3915, it will have a good chance to gain upside momentum in the next few weeks.

S&P 500 has already made several attempts to settle above 3975, but these attempts yielded no results. A successful test of this level will push S&P 500 towards the important resistance at 4000.

Traders should note that the market may stay choppy ahead of the Fed Interest Rate Decision, which will be announced on December 14.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

Vladimir is an independent trader and analyst with over 10 years of experience in the financial markets. He is a specialist in stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading.

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