As earnings season continues in full swing, tons of economic data, even the FOMC, did not cause too much volatility for the S&P 500. The 5000 mark is in sight, but the final data of this busy week may be the most important one yet. Today, nonfarm payrolls change is expected to fall to 185k, but perhaps the real market expectation is a bit lower than that after the recent weak data from continuing claims, ADP, and the employment sub-index from ISM Manufacturing. While the job market shows normalizing signs, recent PMI data shows a significant recovery of activity in the economy. On top of that, inflation easing as well is giving a boost to the index to new highs. However, the market optimism on early and many rate cuts might be corrected after the FOMC meeting where Powell mostly dismisses the idea of a rate cut in the March meeting.
(E-Mini S&P500 Daily Chart)

5000 is a key resistance level for the S&P 500 over the medium term. The upper line of the trend channel and Fibonacci 76.4% extension converge there. Coupled with its significance as a psychological level, the likelihood of a possible reversal has increased. On the other hand, strong earnings, the growth potential of AI, anticipated FED cuts (even if not as early as expected), and robust economic activity support further upward moves. In the event of a reversal, the 34-day moving average might be crucial for identification. The 34 SMA is close to the short-term trendline, and a break could lead prices to 4600 for a pullback. Nonetheless, the uptrend persists, and fundamentals continue to support more upside. Therefore, any potential retreat might present buying opportunities over the medium term, unless there is a significant change in the economic outlook in the US.