S&P 500 broad market index futures added
0.6% to 5467 points, marking another record-breaking week. The benchmark
briefly climbed to 5516 points, setting a new historical high, before sharply
retracing and erasing 1.6% of the week's gains. This retracement occurred without
any specific catalyst. NVidia (NVDA), the current rally leader, saw its share
price drop by 3.5% to $130.78, dragging down stock indexes. The Nasdaq 100
dropped by 1.0%, and the S&P 500 index lost 0.4%, continuing to drift down
on Friday. NVDA further declined by 1.7% to $128.49 in premarket trading.
Investors are also on edge ahead of the triple
witching hour on Friday, as futures and option contracts worth about $5.5
trillion are set to expire. Many of these contracts will likely be rolled over
into new ones, potentially leading to elevated volatility. The direction of
this volatility remains uncertain. Some guidance might come from the June PMI
readings for the U.S., which will be released later today. However, investors
preoccupied with portfolio reallocations may not pay much attention to the
data, leading to unexpected reactions. Consensus expectations suggest a decline
in PMIs, which, coupled with weaker May retail sales, could support the idea of
further economic weakening in the U.S. and an upside move in the S&P 500
index towards extreme targets of 5650-5750 points.
However, large investors foresee a different
scenario. The SPDR S&P 500 ETF Trust (SPY) reported net outflows of $6.9
billion and $7.5 billion over the past couple of weeks. This week, another
$12.2 billion was withdrawn, marking the largest net outflow since February
2020, when investors pulled $21.0 billion from the fund, followed by a
significant market correction. While this doesn't guarantee a repeat, the
triple witching could reduce outflows and attract new money into the stock
market. Nevertheless, caution is advised.
From a technical perspective, the S&P 500
index outlook remains largely unchanged. It has surpassed its primary targets
of 5250-5350 points and is now aiming for extreme targets of 5650-5750 points,
potentially achievable by mid-July. Immediate resistance is at 5560-5580
points, with support at 5460-5480 points.
Oil prices are holding above the support level
of $80.00-82.00 per barrel for Brent crude. Prices received additional support
from OPEC+, which indicated that any increase in oil production in October
would be symbolic compared to current levels. The primary scenario suggests oil
prices could rise towards $88.00-90.00 per barrel.
Gold prices, having reached mid-term targets
of $2000-2100 per troy ounce, are now eyeing extreme targets of $2400-2500.
There is limited room for further increases, and a pullback could occur soon.
For a downside scenario targeting $2200 per ounce to materialize, support at
$2300-2320 must be breached. Immediate resistance is at $2390-2410.
The U.S. Dollar has resumed its rally, with
EURUSD sliding to 1.06700-1.06900 lows. The nearest support has now moved down
to 1.06000, allowing further room to the downside. The primary technical downside
target for EURUSD is at 1.05000.