The S&P 500 is trading lower after the Durable Goods Orders in the US climbed by 1.3% monthly in October, representing a higher reading than projected (0.9%). However, the markets were disappointed as this number represented a contraction when compared with September’s upward revision that showed a 2.1% increase.
If this data piece was less than impressive, the Initial Jobless Claims numbers were even far less so. For the 2nd week in a row, the number of persons filing for jobless benefits climbed from 748K to 778K, beating the consensus number of 732K.
The climb towards new highs on the S&P 500 has been accompanied by a surge in the CNN Fear & Greed Index. One week ago, this index was at 63 points; it is now at 90. This indicates how quickly risk sentiment has escalated among the retail segment of the market. For discerning investors, this is a sign of caution, as extreme greed marks the time when the institutional players start to distribute the asset in question. The question many traders would have to answer is whether the S&P 500 has reached a top or not.
Technical Levels to Watch
The S&P 500 index was unable to breach record highs and is currently experiencing a pullback. Extension of this pullback move targets the 2 September former all-time high at 3588.1, with 3528.9 and 3481.6 forming the next downside targets.
A break above the current all-time high of 3646.0 is needed to re-establish the breakout move above the triangle, with possible short term targets at the 127.2% and 141.1% Fibonacci extension points at 3738.6 and 3848.3 respectively.
S&P 500 Index; Daily Chart