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S&P 500 Index Outlook: Muted Volume Points to Short Term Correction

S&P 500
S&P 500

The S&P 500 index rose slightly on Wednesday, seeing its 2-day strong rally muted by the sharp increase in initial jobless claims. Also, dwindling energy stocks, hit by Thursday’s correction, took the steam off the S&P 500 index.

Initial Jobless Claims for the week ended 17 July rose to 419K from the upward revision of 368K seen the previous week. This figure exceeded market estimates of 350K. There was also an increase in the 4-week average by 750. The data signify a stall in progress in the jobs market as the coronavirus delta variant hangs like a cloud over recovery hopes. 

The S&P 500 index is trading at 0.2% higher.

Technical Outlook for S&P 500

The S&P 500 index is testing the 4368 price resistance at the moment. A break of this area allows the index to reach for the current all-time high at 4393. If this level is uncapped, a move towards 4408 (88.6% Fibonacci extension) or 4453 cannot be ruled out.

On the flip side, a rejection at 4368 presents an opportunity for the bears to aim for the 4301 price mark, with 4275 and 4257 serving as potential downside targets.

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S&P 500 Index: Daily Chart

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