2 SPX Takeaways From Government Shutdown, Earnings Season

Market Trend Analysis - The S&P 500 Index (SPX) has shown an "orderly" upward trend, with a channel connecting higher lows since May 23 and higher highs since early July, indicating bullish control [1][2] - Recent price action has become less orderly, with a slight close below the bull channel and significant intraday movements, but the SPX managed to close above the 50-day moving average [2][8] Earnings Season and Economic Data - The earnings season has concluded, and the SPX is up 23 points from its October 1 close of 6,711, despite the government shutdown from October 1 to November 13 [4] - The highest close during the shutdown was 179 points above the October 1 level, while the lowest was 159 points below, indicating volatility but little net directional movement [5] Technical Indicators - The SPX is currently wedged between support from the 50-day moving average and previous intraday lows in the 6,630-6,650 range, with the lower boundary of the bull channel around 6,760 [9][8] - The flattening of the 30-day moving average suggests potential resistance at the 6,760 level, which is also 10% above the February 2025 high [8] Upcoming Events and Expectations - Key upcoming events include Nvidia (NVDA) earnings and reports from major retailers such as Home Depot (HD), Walmart (WMT), and Target (TGT) [9] - Economic reports on employment and inflation are expected in the next two weeks, which will influence the Federal Open Market Committee's decisions regarding potential rate cuts [10] Market Sentiment - There has been a decline in expectations for a rate cut, with a 44% probability assigned at Friday's close, down from 67% the previous week, yet the SPX has remained resilient [11] - The optimism among option buyers has decreased, with the 10-day buy-to-open put/call volume ratio rising from 0.42 to 0.51, indicating lower expectations despite stable stock levels [12][13] Options Market Dynamics - Significant open interest in puts and calls around the 6,700 and 6,750 strikes suggests potential pinning action, with the 6,750 strike acting as resistance [16]