Current trend

During the morning session, the leading index of the US economy S&P 500 corrected at around 4346.0. Analysts at Morgan Stanley banking holding predict a significant decline in quotations in the medium term, assuming a target of 3900.0, which is about 10.0% below the current price. According to experts, corporate earnings per share (EPS) in the second quarter could be 185.0 dollars from an average estimate of 220.0 dollars earlier. The key risk factor is considered to be the decrease in cash liquidity, which arose due to record high volumes of treasury bonds issuance.

The bond market is also putting pressure on asset positions. The auctions for the placement of short-term bills were held the day before: yields on 3- and 6-month Treasuries were 5.180% and 5.215%, up from 5.130% and 5.170% previously recorded, while 2-year Treasuries are yielding at 4.670% after 4.300%.

The growth leaders in the index are Boston Properties Inc. ( 9.88%), Alexandria Real Estate Equities Inc. ( 4.98%), Newell Brands ( 4.71%), WestRock Co. ( 4.33%).

Among the leaders of the decline are Carnival Corp. (-7.59%), Tesla Inc. (-6.06%) CarMax Inc. (-5.75%).

Support and resistance

The index quotes continue the global trend, once again moving away from the resistance line of the global ascending corridor with the boundaries of 4460.0-4070.0 on the daily chart.

Technical indicators are holding a buy signal, which has begun to slow down, indicating a possible correction: the fast EMAs of the Alligator indicator are way above the signal line, and the AO histogram, being in the buy zone, is forming descending bars.

Support levels: 4300.0, 4160.0.

Resistance levels: 4390.0, 4500.0.

Trading tips

If the asset reverses and contiues declining and the price consolidates below the local support level of 4300.0, short positions can be opened with the target at 4160.0. Stop-loss — 4400.0. Implementation time: 7 days and more.

If the asset continues local growth and the price consolidates above the local resistance level of 4390.00, long positions will be relevant with target at 4500.00. Stop-loss — 4330.0.