The S&P 500 index is making a solid case to burst well above $3500 as it opens 0.25% higher on the day. Yesterday’s dovish Fed is giving the markets a strong upside push, giving rise to yesterday’s new record on the index as investors applauded the Fed’s move, which will likely keep the cost of acquiring credit and capital for trading cheaper. Technology and energy shares are leading the muted upside on the S&P 500.
As at the time of writing, the S&P 500 Index was trading at 3493.8, off intraday highs of 3498.7. However, volumes remain low as markets weigh the impact of the proposed stock splits of Apple and Tesla on the market. Furthermore, the coronavirus situation seems to be a worry for investors and is dampening the bullish sentiment from yesterday’s announcement by FOMC Chief Powell.
US data today were mixed, as the Chicago PMI number for August came out 2 points lower than the July figure. Personal Spending m/m also fell from 6.2% to 1.9%, even though it trumped the market expectation of 1.5%. On the other hand, core PCE Price Index stayed static at 0.3%.
Technical Outlook for S&P 500
The S&P 500 index continues to trade within the ascending channel and is gradually making its way to the 100% Fibonacci extension mark at 3528.5. However, the psychological resistance of 3500 stands in the way. This resistance must give way for this move to be actualized.
On the flip side, rejection at the psychological resistance or even at the channel’s return line could allow for a retracement towards 3393.5, with 3335.5 and 3282.2 being downside targets that would require a breakdown of the channel to be attained.