The S&P 500 index gained 0.38% yesterday as it extended its Tuesday’s advance of 1.5%. The market is gaining following worse-than-economic data amidst reduced pressure for further monetary policy tightening.
On Friday, the index bounced from the daily low of around 4,356 despite a hawkish speech from Fed Chair Powell, and recently it has been selling off on strengthening the U.S. dollar, among other factors.
Stocks will likely open 0.2% higher this morning, so the S&P 500 will remain above the 4,500 level. On Tuesday, it broke above an over-month-long downward trend line, as we can see on the daily chart:
Futures Contract Extends Its Advance
Let’s take a look at the hourly chart of the S&P 500 futures contract. This morning it’s trading along the 4,530 level. The nearest important level of resistance is at around 4,540-4,550, marked by the previous local highs.
Conclusion
The S&P 500 index rallied on Tuesday and yesterday it broke above the 4,500 level. Investors sentiment improves as the pressure for further monetary policy tightening is somewhat easing. So has the market reversed its downtrend? For now, it looks like an advance within a medium-term consolidation following a first half of the year rally. The markets will be waiting for tomorrow’s monthly jobs data release.
Here’s the breakdown:
- Stock prices retraced more of their recent declines.
- The S&P 500 broke above the 4,500 level, but it may face some uncertainty ahead of tomorrow’s jobs data.
- In my opinion, the short-term outlook is still bullish.