The S&P 500 index has had a strong opening to the session, pushing upwards with an upside gap. Energy stocks are driving the gains in the S&P 500 index, mirroring the 3% rise in crude oil prices. However, all 11 sectors of the index are trading higher.
The markets are also being pushed by the risky sentiment that is driving the markets. The VIX indicator is down 12%, showcasing the gains of the S&P 500.
Credit Suisse analysts say that while the big picture is that of the unfolding of a longer consolidation within the core uptrend, the S&P 500 index needs to hold its own below the 3778/87 level to maintain the threat of a deeper correction.
The index is currently trading 1.55% higher on the day.
Technical Levels for S&P 500 Index
Today’s upside gap has sent the index back into the ascending channel, thus preserving the bullish bias. This move has also violated the 3765.1 resistance and has opened the door towards the possibility of a new record. However, a record move needs to break the barrier constituted by the previous all-time high of 3870.9, with 4005.9 (161.8% Fibonacci extension) looking like a potential future target for record-seeking bulls.
On the other hand, the lower edge of the channel faces risk of a potential breakdown if there is a lack of upside momentum. A failure of this point brings 3765.1 back into the picture as a downside target. Additional support targets to the south remain at 3721.2 and 3645.4.
S&P 500 Index; Daily Chart