Basic overview
The S&P 500 gave up most of the gains that had accumulated since Tuesday when Trump said he would be open to ending the war with Iran without the condition of opening the Strait of Hormuz. Later that day, the Iranian president also said they were ready to end the war but wanted guarantees.
The catalyst for the sell-off was Trump’s address to the nation where he was expected to provide an “important” update on the US-Iran war. Unfortunately, Trump has disappointed the market Because he repeated the same old things and maintained his militant bias.
The market wrongly ignored yesterday’s news before the speech. In fact, Trump posted this on Truth Social:
“The president of the new Iranian regime, who is less extremist and much more intelligent than his predecessors, has asked the United States of America for a ceasefire! We will consider when the Strait of Hormuz is open, free and clear. Until then, we are sending Iran back into oblivion, or, as they say, back to the Stone Ages!!! President D.G.T.”
Trump imposed a 5-day ceasefire last week, then extended it for another 10 days (scheduled to expire on April 6). At the same time, he made clear that any ceasefire would depend on the reopening of the strait, despite downplaying this condition just a day earlier. He also ended his letter with the usual threats.
Furthermore, the White House indicated before the speech that Trump would reiterate a two- to three-week timeline for ending the war. This extends beyond the current ceasefire window, leaving ample room for tensions to escalate again. This would keep the market under pressure (all other things being equal).
Technical analysis of the S&P 500 – daily time frame
Standard & Poor’s 500 – daily
On the daily chart, we can see that the S&P 500 has fallen back to the key support area at 6,530. This is where we can expect buyers to step in with a specific risk below the support level to put them in a position to move higher to the trend line. On the other hand, sellers will look for a break to increase bearish bets to the 6,363 level.
S&P 500 Technical Analysis – 4 Hour Time Frame
Standard & Poor’s 500 – 4 hours
On the 4-hour chart, there is not much we can glean from this time frame, as buyers will be looking for a bounce at support, while sellers will be waiting for a breakout. We need to zoom in to see more details.
S&P 500 Technical Analysis – 1 Hour Time Frame
Standard & Poor’s 500 – 1 hour
On the 1-hour chart, we have a simple bearish trend line outlining the downward movement. If we get a pullback to the trend line, we can expect sellers to rely on it with specific risks above it to continue pushing towards new lows. On the other hand, buyers will look for a breakout to increase bullish bets to the key trend line around the 6,670 level. Red lines define Average daily range For today.
Upcoming stimuli
today We get the latest US unemployment claims numbers. Tomorrow, we conclude the week with the release of the US Non-Farm Payrolls (NFP) report.
