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S&P 500 Index At 10-Week highs, Returns Above the 200-Day SMA


S&P 500 trades higher for the third consecutive session pushing above the 200-day moving average and making fresh 10-week highs. The index managed to return above the 3,000 and the 200-day moving average for the first time since March 5. Staying above those two levels will be a bullish development for the index. Headlines on positive developments around the coronavirus vaccine also help stocks. Novavax (NVAX) 20% higher as it starts Phase 1 Coronavirus vaccine, while Merck announced two agreements with other institutions to work toward developing a coronavirus vaccine and antiviral treatment.

On the economic data front, the Conference Board Consumer Confidence Index surprised positive as it rose to 86.6 in May from 85.7 in April. The Present Situation Index fell from 73 to 71.1, while the Expectations Index rose from 94.3 to 96.9. The United States Dallas Fed Manufacturing Business Index came in at -49.2 in May; the previous month reading was at -73.7.

On the housing sector, the United States Case-Shiller Home Price Index came in at 3.9%, beating the expectations of 3.4% in March. The Housing Price Index registered in at 0.1%, below the market consensus of 0.3%. The Chicago Fed National Activity Index plunged to -16.74 in April from previous -4.19.

Travel stocks are leading the rally with Norwegian Cruise Line +15.68% at 16.08, United Airlines +14.65% at 29.02, Carnival Corp. +13.49% at 16.40, and American Airlines Group +12.67% at 10.92.

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S&P 500 Analysis

S&P 500 is 0.72% higher at 3,015 as the bulls returned emphatically above the 200-day moving average. Now the index might start another bull market as long as it manages to stay above the 3,000 mark. What can cancel the bullish momentum is a close today below the 3,000 mark. 

Looking at the daily chart, the initial resistance for the S&P 500 index will be met at 3,023 the daily high. The next level to watch is at 3,041 the high from March 6. A close above will give buyers extra strength to test the 3,117 high from March 5.   

On the other hand, the daily low at 2,984 will provide the first support for the S&P 500 index. A break below 2,984, might open the way for 2,964 the 100-day moving average. If bears pierce that level, then the next support stands at 2,906 the low from May 22.