Solid data and progress in tax-cut approval support market sentiment. Will S&P 500 continue rising?
The US economic growth accelerated to 3.3% in Q3 from 3.1% in second quarter, according to the GDP’s second reading. Recent economic data were strong: the Conference Board’s US consumer confidence index rose to its highest reading since 2000 and the S&P/Case-Shiller national index of house prices rose at the fastest pace in more than three years. And the Senate Budget Committee approved the Republican tax bill setting it up for a full Senate vote planned later this week, possibly as early as today. Recent upbeat corporate reports, positive data and progress in the tax plan are bullish for US stocks.
On the daily chart, the S&P 500 is above the 50-day moving average MA(50), which is rising.
We believe the bullish momentum will continue once price closes above the upper Donchain channel at 2634.32. A price above that level can be used as an entry point for a pending order to buy. The stop loss can be placed below the last fractal low at 2556.48. After placing the pending order the stop loss is to be moved every day to the next fractal low, following Parabolic signals. Thus, we are changing the probable profit/loss ratio to the breakeven point. More conservative traders can switch to the 4-hour chart and move the stop-loss in the direction of the trade. If the price meets the stop loss level (2556.48) without reaching the order (2634.32), we recommend cancelling the position: the market sustains internal changes, which were not taken into account.
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