FundamentalOverview

The S&P 500 ralliedinto new all-time highs this week following a couple of positive catalysts. Thefirst one came from Fed’s Bowman who delivered dovish comments andeven suggested that she would support a rate cut in July if inflationarypressures were to be muted. Since she’s been a hawkish member, it wasmeaningful for the market.

The second catalyst, whichgave the green light for the rally, came later in the same day as Iran’s retaliation was seen as just a show much likethe one witnessed in 2020 with Suleimani. The market started to expect the endof the conflict which was then confirmed by Trump’s post on his social mediaplatform.

Finally, yesterday’s rallygot attributed to a WSJ report saying that Trump could speed up the nominationof the new Fed Chair for 2026 which the market expects to be a dove and tofollow the President’s agenda. I’m personally sceptical of this take, but herewe are.

In the big picture, thepath of least resistance remains to the upside as growth expectations continueto improve. We now have very little risks ahead. The only one I can see isTrump’s bill failing in the Senate, which would likely just provide a pullbackto buy at better prices.

The trade war shouldn’t bea risk anymore as the deadline will be extended and it’s now clear to everyonethat we will settle around 10% tariff rate.

Finally, we have the US NFPand US CPI coming up in the next two weeks and those will be key for the Fedand market as they will influence interest rates expectations.

The positive driverscontinue to be expansionary fiscal policy and the dovish Fed reaction function.The main driver of the stock market is growth expectations, so as long as thoseremain skewed to the upside, we should keep grinding higher.

S&P 500Technical Analysis – Daily Timeframe

On the daily chart, we cansee that the S&P 500 eventually managed to break into a new all-time high. Thebuyers piled in more aggressively on the breakout as the momentum kept going. Forthe sellers, there’s not much they can do here other than waiting for a fallback below the previous all-time high around the 6,150 level before consideringshorts into the 6,000 level next.

S&P 500 TechnicalAnalysis – 4 hour Timeframe

On the 4 hour chart, we cansee that the bullish momentum was so strong that the price broke through astrong resistance zone where we have also the upperbound of the rising channel. If we get a pullback into the 6,150 zone, we canexpect the buyers to step back in with a defined risk below the zone toposition for new highs. The sellers, on the other hand, will look for a breaklower to start targeting the 6,000 level next.

S&P 500 TechnicalAnalysis – 1 hour Timeframe

On the 1 hour chart, there’snot much else we can add here but on a short term basis, if we get a pullbackinto the minor upward trendline, the buyers will likely lean on itto keep pushing into new highs. From a risk to reward perspective, a pullbackinto the 6,150-6,160 zone would be better though. Dip-buyers could split theirpositions between the trendline and the support zone. The red lines define the average daily range for today.

UpcomingCatalysts

Today, we conclude the week with the US PCE price index andthe Final University of Michigan Consumer Sentiment report.