An excellent month for the S&P 500 appears to be signing off on a muted note as the index opened at all-time high levels but failed to sustain the tempo. It is presently trading 0.15% lower on a day of very little news and muted volumes, as traders rebalance their portfolios.
Today marks the 6th consecutive trading session where the S&P 500 has hit new record highs, but a lack of follow-through buying has hit the index. Today marks the rebalancing of Apple and Tesla stocks following the stock splits, with Apple share price rising 2.42% higher as at the time of writing to push into the list of today’s top performers on the S&P 500.
August has traditionally been a slow month for the financial markets, but not this year. At a gain of 7.08% for the month as at the time of filing this report, August has been the 2nd best month of 2020 for investors on the S&P 500. Not only has it recovered the losses of 2020, but it has crossed well above the previous year high of 3393.5 seen in February 2020. The S&P 500 looks set to close out the 5th consecutive month of gains following the coronavirus-induced crash of February and March 2020.
Technical Outlook for S&P 500
The upside target to beat for bulls remains today’s high at 3509.7. To the upside, a potential target to aim for could be the 3528.5 price level, which is where the 100% Fibonacci extension from the price swing of 23 March to 29 April is found. Further ascent could target the 3738.6 price mark formed by the 127.2% Fibonacci extension level.
On the flip side, exhaustion of the upside move would enable the S&P 500 sets its sights towards the lower channel border, bringing it into contact with the 3393.5 support line. Below this support, 3335.5 and 3282.2 form additional downside targets, but these are only attainable if price overcomes the channel’s lower border in a breakdown move.
S&P 500 Daily Chart