S&P 500 Approaches Key Resistance Levels Amid Cooling Inflation

The S&P 500 has surged back to trendline resistance following a notable 1.8% rise in yesterday’s session, driven by optimism around cooling US inflation data. As of today, the index is trading near 5,967, with trendline resistance situated between 5,985 and 5,990 for the intraday session.

What’s Next for the S&P 500?

A break above 5,990 will not immediately confirm a breakout, as the index faces additional resistance at 6,018. Securing the pivotal 6,000-point level could provide room for consolidation, boosting investor and trader confidence that the index may continue to climb.

Key Factors to Watch

With Donald Trump’s inauguration day on January 20th (next Monday), markets could experience heightened volatility in the lead-up to this significant political event. Any uncertainty may create short-term price fluctuations.

Downside Risks for the S&P 500

If resistance at 5,985-5,990 proves too strong, the S&P 500 may pull back towards trendline support at 5,830-5,840. A failure to hold this support could lead to a deeper correction, potentially retesting the recent low of 5,771.

What This Means for Traders and Investors

For traders, the levels of 5,985 and 6,018 will be critical to monitor, as they could signal a broader breakout or a reversal. Investors should remain cautious in the short term while keeping an eye on potential support zones at 5,830 and 5,771.

Final Thoughts

The S&P 500’s price action this week is likely to set the tone for the coming weeks, especially with political and economic events shaping sentiment. Stay updated on the latest developments to make informed decisions.

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