U.S. equity markets oscillated yesterday as the FOMC minutes release had everyone on edge right from the opening bell. Much to the bear’s frustration, however, markets ultimately ended slightly lower on the day after the Fed reaffirmed its stance to begin tapering by the end of the year. Policymakers made no hints as to when the actual taper might come, leaving room for speculation from now until the next meeting in late September.

Our chart to watch for the day is the State Street S&P 500 ETF , which will look to rebound off a key support level after investors digest the latest weekly jobless claims data. Analysts are expecting for 330,000 new unemployment claims, which would mark a deterioration from last week’s reading of 320,000 filings. This weekly report will shed some light on the labor market recovery, which is one of the main points of interest that the Fed will likely address during the highly anticipated meeting coming up in September .

Chart Analysis

Consider SPY’s one-year daily performance chart below. This ETF has been climbing higher along its 50-day moving average (blue line) since the end of 2012; notice how SPY has managed to rebound off this moving average after virtually every single pullback, with the exception of the “taper scare” in late June of this year. Given this technical pattern, it’s important to keep a close eye on SPY over the coming days, seeing as how it is once again testing this rising support level. A definitive break below $165 a share would likely welcome accelerating selling pressures that can sink SPY as low as the June lows near its 200-day SMA around $155 a share .

Click to Enlarge

Likewise, if SPY established support here it will likely welcome back bargain shoppers and swing higher over the coming days; keep an eye on it as it approaches $170, seeing as how it failed to break this resistance level last time .

Outlook

If the latest labor market report strikes a bullish tone with investors, SPY should have the wind at its back; in terms of upside, this ETF has upcoming resistance at around $167.50 a share followed by the $170 level. On the other hand, lackluster employment data can easily bring out the bears ahead of the weekend; in terms of downside, this ETF has immediate support around $165 a share followed by the $160 level. As always, investors of all experience levels are advised to use stop-loss orders and practice disciplined profit-taking techniques.

Follow me on Twitter @SBojinov

Disclosure: No positions at time of writing.

 

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