The S&P 500 index futures have made a big break to the upside as tech stocks rally this Columbus Day holiday in the US. Technology stocks made a very strong start to the week, as did the Communication Services index. Both sectors were up by more than 1%, thus overcoming the 0.9% drop of the Energy Index that was caused by lower crude oil prices this week.
The S&P 500 is trading on full bid at 3529 with a solid 1.5% gain, as feelers from stimulus talks appear positive. Republicans approve of President Trump’s stimulus plan that was released last week.
Today is Columbus Day in the US; a market holiday. There are no major macroeconomic releases, and price action would therefore be dominated by news already released earlier today.
Technical Outlook for S&P 500
Price is well on the way to the projection point, following the completion of the breakout from the neckline on the inverse head and shoulders pattern. 3528.9 is the current resistance, and appears to be the price level that corresponds to the measured move that completes the pattern. However, a break above this level puts the S&P 500 on the cusp breaking the all-time highs at 3588.1, which would set it on the way to the 3600 mark for the first time ever.
If on the other hand, the 3528.9 resistance is able to resist further upside push from buyers, then we could see a pullback towards 3481.6. This support may provide a fulcrum for a bounce that retargets the 3528.9 support, or may only serve as a pitstop for further downside action. The latter would lead to a drop towards 3393.5, with 3335.5 and 3282.2 remaining valid support areas.
S&P 500 Daily Chart