S&P 500 Hits New Highs As China Cuts Tariffs Amid Coronavirus Outbreak
The S&P 500 index is up by nearly 0.3% after briefly touching off all-time high levels at 3360. Sentiment in global stocks and risky assets received a boost today after China reduced tariffs on $75 billion worth of goods from the US. China’s Finance Ministry announced the measure Thursday, stating that it was part of the phase 1 deal conditions that it was fulfilling. This news allowed traders on the US markets to continue to revel in the positive sentiment of the last three days to push the S&P 500 towards new highs.
This move takes this week’s gains on the S&P500 to nearly 4% as markets shook off coronavirus fears and a string of good news from the Institute of Supply Management (ISM) PMI data showed expansion of the manufacturing and services economy in the US.
The S&P 500 is currently trading at 3347.5, having experienced a pullback from the all-time high posted earlier in the day by S&P 500 futures.
Yesterday’s daily candle close came with the required upside penetration close, fulfilling the requirements for a confirmation of the upside break from last week’s resistance at 3299.7, which is also the neckline of the evolving double bottom pattern whose lows rest on 3216.5. The price candle for yesterday completed the measured move of the double bottom whose lows rest on 3216.5, but upside pressure persists.
Confirmation of the breakout from the new resistance at 3335.7 allows the S&P 500 index to continue to push towards new highs, with the recent all-time high posted today at 3360 being the initial resistance to the breakout move.
Failure to confirm the breakout from 3335.7 allows the S&P 500 to retest the 3299.7 neckline, now acting as a support. Further support targets exist at 3263.3 (Fibonacci 100.0% extension) and 3216.5 (previous highs of 30 December and 31 January 2020).