The S&P 500 opened the day lower after the weekly initial jobless claims data topped the 1 million mark once more. This report was an unexpected outcome, as the markets had forecast a further drop from last week’s number to 930K. Last week’s figure was revised upwards from 963K to 971K. However, the report signals a loss of momentum in the attempt by the US jobs market to put on some recovery momentum, resulting in negative market sentiment that has sent the S&P 500 index 0.25% lower.
Further details from the Department of Labor’s report indicate that the advance number for seasonally adjusted insured unemployment during the week ending August 8 was 14,844,000, which was a drop by 636,000 from the previous week’s figures. Also, the 4-week average for initial jobless claims dropped by 79,000 from the previous week’s number.
The S&P 500 index trades at 3367.0 currently, indicating that the index has been rejected at the major support of 3393.5 following yesterday’s all-time highs.
Outlook for S&P 500
After touching off all-time highs, the index suffered a drop of 0.44% yesterday. The drop has continued today, as the index has found the going into record territory a little too much to handle at this time. Price is now on its way towards the 3335.5 support, with 3283.2 (February 4 and August 4 lows) lining up as an additional target to the south. 3137.0 and 3070.8 continue to retain relevance as potential price targets to the downside.
On the flip side, yesterday’s record high remains the price level to beat for the bulls. A break of 3393.5 establishes the higher highs required for the uptrend. This move would also invalidate the wedge pattern.