Daily Analysis US INDICES 16 May 2023

"Market Volatility Looms as Investors Brace for Debt Ceiling Talks and Economic Uncertainty; Oil Prices Surge, Bitcoin and Ethereum Face Bearish Pressure"

U.S. stocks are expected to open cautiously on Tuesday as investors await the resumption of debt ceiling talks at the White House. S&P 500 Futures are trading slightly lower by 0.1%, while Nasdaq 100 Futures remain relatively flat.

Investors are particularly concerned about the progress in raising the debt ceiling before June 1, which marks the earliest potential default date. The scheduled debt-ceiling discussions on Tuesday between President Joe Biden and House Speaker Kevin McCarthy are closely watched. The Treasury Department has warned that the U.S. could default on its debt obligations, and Treasury Secretary Janet Yellen has emphasized the potential for an "economic catastrophe" if a deal is not reached.

Investors are also keeping an eye on April's retail sales data for insights into consumer well-being.

The price action on the S&P500 has entered a potential range, reflecting the market's uncertainty. The 4200 resistance area poses a significant challenge for the S&P500 to overcome. If a breakout occurs, the next resistance level to watch will be 4300, corresponding to the 61.8 Fibonacci level. The Nasdaq confirmed a breakout at 13300 and continued its upward movement towards the next target of 13700. This level aligns with the 100SMA on a weekly chart and has previously acted as a significant support/resistance level.