After a solid year-to-date run, The S&P 500 futures (CME: ES) stumbled at a familiar resistance as the OECD’s alarming declaration of a weak global economic recovery echoes in the air, intensifying the uncertainty ahead of next week’s Federal Reserve interest rate decision. 

The OECD projected 1.6% economic growth for the US in 2023, which is expected to contract further to 1% in 2024 as tight monetary conditions take their toll. While this is a 0.1 percentage point upgrade from their prior prediction, the recovery is expected to be measly by past standards. Adding fuel to the fire, the US trade deficit widened to $-74.6Bn from the prior $-60.6Bn. With an eventful week on the horizon, can the futures find its footing again? 

Technical 

On the 4H chart, a double top has formed at the top of the uptrend, with the bulls stumbling yet again at the 4,304.00 resistance. The selloff resulted in the futures trading below the daily pivot resistance of 4,282.75, with immediate support at 4,260.75 (S1). 

While the support at S1 holds, the futures could retrace the selloff slightly toward the pivot point, as traders could hesitate to enforce meaningful price action ahead of next week’s interest rate decision. A breakthrough at the pivot could bring resistance at 4,296.25 (R1) back into play as a hurdle to the bulls as they re-attempt the psychological resistance at 4,304.00. 

However, if S1 fails to support the buyers, a breakdown could open a runway for further downside, confirming the double top selloff toward 4,242.75 and 4,227.50. 

Summary 

While the equity market experienced a downturn on Wednesday, the S&P 500 futures are holding on to support at 4,260.75. If support holds, there could be a correction toward the pivot point at 4,282.75 in the Thursday session. 

Sources: Koyfin, Tradingview, OECD.org