The S&P 500 index has given up early gains and is now trading 0.15% lower, as hopes for a wide-ranging stimulus package wanes.
Senate Republicans have opted to vote on Wednesday for a reduced $300 billion coronavirus relief bill, which is far short of the $2 trillion that Democrats want. Wranglings over the scope of the relief money have dragged on since the last relief ended on July 29. US President Trump’s targeted stimulus also has Democrats unmoved.
Despite comments by US House Speaker Nancy Pelosi yesterday on wanting to see a bill passed before the US elections, it appears that investors were hoping for a lot more, but will have to settle for less.
Technical Outlook for S&P 500 Index
Today’s decline is challenging the 3481.6 support line, which is the only barrier that stands between sellers and the neckline of the inverse head and shoulders pattern. Below this neckline, the 3393.5 and 3335.5 support levels beckon if the decline extends below the neckline and invalidates the pattern.
A bounce on the neckline or a failed breakdown of the 3481.6 support ultimately targets the 3528.9 resistance, with the all-time high of 3588.1 still relevant as the final resistance to a record-breaking advance. Analysts at Credit Suisse have adopted this outlook, as they feel a neckline bounce is a possible outcome which will trigger a push to the 3588 record high. This high completes the price objective of the break of the pattern’s neckline and completes the measured move.
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S&P 500 Daily Chart
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