Wall Street indices started on positive foot the day with the S&P 500 adding 1.30% at 2,975.90. The Dow Jones trading 1.64% higher at 26,788, while the Nasdaq trading 1.63% higher at 8,107 as investors cheer on news that US and China trade negotiators have agreed to restart talks in early October. Sentiment also gets a boost from a series of positive economic reports: the US ISM Non-Manufacturing PMI came in at 56.4 in August beating expectations of 54, the United States Factory Orders (month over month) came in at 1.4%, topping expectations of 1% in July. The Markit Services PMI came in at 50.7 in August (final) below forecasts of 50.9, the Composite PMI came in at 50.7 below forecasts of 50.9 in August. Initial Jobless Claims came in at 217K, above forecasts of 215K in August 30. ADP Employment Change came in at 195K in August above expectations of 149K.
S&P 500 gets a lift from Nordstrom +7.08%, Rockwell Automation +6.53%, Mosaic +6.28% and Tapestry +6.02%, on the other hand the index is dragged by Church & Dwight -4.71%, Newmont Goldcorp -4.00%, Motorola -2.82% and NextEra -2.19%.
The CBOE Volatility Index or fear index, is giving up 9.17% at 15.74 to confirm the positive market mood.
S&P 500 today regains the bullish momentum as the index breaks above emphatically above the 200 day moving average. S&P has formed a strong floor at 2,822 during August which absorbed all the offers. On the upside immediate resistance is at 2,985 today’s high while more pressure will be met at 3,020 the July top. On the downside, S&P 500 first support stands at 2,935 today’s low and then at 2,911 the 100 day moving average. Traders looking to enter long positions can buy if the index closes above 2,985 today’s top, targeting the 3,000 level for profits, and can keep their long positions as far the index is trading above the 2,935 mark.