Wall Street could regain height while waiting for the NFP
The US stock market could regain strength this week according to technical analysis. The S&P 500 formed a bullish engulfing on the daily time frame on Friday, despite several disappointing catalysts that could have justified a sharp decline in the markets.
The S&P 500 ended up 1% on Friday despite a weak start to the session as Micron (-3.0%) released forecasts for the fourth quarter of the fiscal year well below consensus estimates, citing a weakened demand environment for smartphones and PCs, General Motors (+1.4%) which cut its Q2 net profit forecast, citing supply chain disruptions, eurozone inflation which hit a new record high and the June manufacturing ISM which saw its weakest reading since June 2020 (53.0%).
The bullish engulfing paves the way for a rebound that could extend to the recent high at 3950 points and the bearish slant through the March and June highs awaiting the monthly US jobs report. Friday.
4-hour chart of the S&P 500 – key levels