S&P 500 futures are rising by 0.95% to
5,721 points on Monday, breaking above the resistance at 5,680–5,700. If the
index holds above these levels, it could advance to 5,780 points. However, an
opening gap signals a possible pullback towards 5,670, as such gaps are
typically closed quickly in the first U.S. trading session. This time, though,
an exception might occur, as large investors continue to exit the market.
The SPDR S&P 500 ETF Trust (SPY) reported
net outflows of $21.03 billion last week, excluding Friday, up from the
previously reported $9.86 billion. This is a substantial sell-off, erasing
nearly all previous upside bets and signaling alarm. Large investors are taking
losses and abandoning long positions without waiting for potential market
improvement. This might be a reaction to last Friday’s triple witching event.
Alternatively, a rally towards 5,800–5,900 points could be followed by a
correction, in which case a swift gap closure might not happen.
On the policy front, U.S. President Donald
Trump is set to introduce reciprocal tariffs on April 2 for countries that
impose tariffs on U.S. imports. However, some positive signals are emerging.
The Wall Street Journal reported that the scope of these tariffs could be
narrowed, potentially omitting some industry-specific levies. While details
remain unclear, this development, combined with U.S. Trade Representative
Jamieson Greer’s scheduled visit to China this week, has provided some relief
to markets.
Key economic data releases will shape
sentiment this week. The U.S. Manufacturing and Services PMI reports for March
are due on Monday, with the manufacturing sector expected to slow while
services may accelerate. For the S&P 500 to break free from recession
concerns, these reports need to show stronger-than-expected expansion. The
final Q4 2024 GDP estimate is of lesser importance now, as investors are
focused on signs of an economic slowdown in Q1 2025. The main event will be
Friday’s release of the February PCE index, the Fed’s preferred inflation
gauge. Analysts expect core PCE, which excludes food and energy, to slow to
2.6% year-over-year from 2.7%.
Technically, the S&P 500 remains on track
for primary targets at 5,800–5,900 points and extreme targets at 6,300–6,400.
Key support lies at 5,570–5,590, while resistance stands at 5,680–5,700. If the
index holds above resistance, it could extend gains toward 5,780–5,800.
Brent crude remains under pressure at $72.00
per barrel, weighed down by recession fears. Support is at $68.00–$70.00, while
resistance stands at $78.00–$80.00. A break below support could push prices
down to $58.00–$60.00.
Gold prices continue their rally, setting a
new all-time high at $3,057 per troy ounce. The next resistance is at
$3,050–3,080, with extreme upside targets of $3,150–3,250. The bullish trend
remains intact, with immediate support at $2,950–2,980.
The U.S. Dollar has entered a correction phase.
The EURUSD has reached its upside target of 1.09500–1.10500 and now faces
significant overbought pressure. A retracement towards 1.06000 has begun, as
the pair struggles to find fresh upside drivers.