Market Starts Trading Week Cautiously

Over the weekend, the S&P 500 futures slightly declined after some selling came into the market on Friday. The expectation of upcoming speeches from Federal Reserve (Fed) officials this week is also contributing to the ongoing downward trend heading into the new week’s cash session.

Early Divergence Continues to Closing Bell

At the start of the trading day, the Nasdaq and Dow Jones futures were behaving differently, with the Nasdaq futures showing more strength while the Dow Jones was stuck around the lowest point of the day. In the initial minutes, a boundary was set for the S&P 500 futures and it faced difficulties in breaking out of it throughout the rest of the day’s trading hours.

The stock market is in a holding pattern, with prices fluctuating within a narrow range of key psychological levels. It seems that the market is waiting for a major event or piece of news to cause a significant shift. A break above or below 4,150 or 4,100 is expected to trigger a significant move in the market.

With several events taking place this week, it’s important to keep an eye on certain levels in the market. The 21-day exponential moving average (EMA) at 4,040 and the point of control (POC) level at 4,153 could play a significant role in shaping the market’s direction. Keep an eye on these key levels as the market waits for a catalyst to make a big move.

Events That Can Help Break The Range 

From an economic event standpoint, it is a relatively light week. On Thursday, the weekly Initial and Continuing Jobless claim numbers will be released at 8:30 a.m. Eastern. Friday will contain the University of Michigan (Umich) Consumer Sentiment Index data at 10 a.m. Eastern.

Federal Reserve (Fed) speakers will likely be the highlight of the week, starting with Fed Chairman Jerome Powell speaking at the Economic Club on Tuesday at 12:40 p.m. Eastern. Michael Barr, Vice Chairman, will also speak on Tuesday at 2 p.m. Eastern. 

MEM Finds Potential Big Winner

Mary Ellen McGonagle (MEM), Senior Managing Director of Equities at Simpler Trading, has recently highlighted one of her favorite technology stocks as the Nasdaq has booked its fifth consecutive green week. With many tech giants posting positive earning reports lately, none have caught her eye more than Meta Platforms (META). During their release, the combination of positive forward guidance and a vast share buyback program led MEM to find a historical similarity that could lead to similar results.

In 2013, the company had a gap in its stock price after an earnings report that marked the beginning of a 59% run in stock price. Key similarities have been found in the heavy volume, Relative Strength Index (RSI), and Moving Average Convergence/Divergence (MACD). 

There are still a few things that MEM is looking for to confirm another possible run, and they can establish it as early as this week. The full article and chart breakdown can be found here. 

Market Struggles to Push Higher, Ends Red

The Nasdaq and the S&P 500 were negative to close the session. The S&P 500 futures closed down 0.58%, losing 24 points, while the Nasdaq futures closed down 0.88%, declining 110 points. The Dow Jones futures followed, closing down 0.14%, decreasing 46 points.