There have been conflicting narratives surrounding the status of the peace talks between Russia and Ukraine. However, an acknowledgement by Ukraine's President Zelensky that peace talks were becoming "more realistic" after three bitter weeks of the war was a positive development.
Earlier in the session and after a wild ride of late on Chinese equity markets, China's State Council announced steps to restore confidence in the economy and capital markets. A new Covid treatment strategy was also revealed to balance Covid containment with economic activity.
U.S equity markets also found encouragement from Fed Chair Powell, admitting "it may take longer than we like" to bring inflation down. Recognition that a slower, longer hiking cycle is required to support a "sustained economic expansion.”
A week ago, we asked here if the recovery from the 4100 low in the S&P500 was a dead cat bounce or the start of a more substantial recovery. As the chart below shows, the S&P500 is now eyeing the band of significant resistance noted in last week’s article at 4400/20.
Should the S&P500 close above 4380/20, we would be more open to the idea that a tradable low of sorts is in place at 4100. However, to ensure that the S&P500 is on a firmer footing, a sustained break above the 200-day moving at 4461 is needed. Until then, we remain cautious and comfortable with the idea, it's better to be too late than too early.
Source Tradingview. The figures stated areas of March 17th, 2022. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation
How to trade with City Index
You can trade with City Index by following these four easy steps:
Open an account, or log in if you’re already a customer
• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
- Search for the company you want to trade in our award-winning platform
- Choose your position and size, and your stop and limit levels
- Place the trade