The S&P 500 index is trading 0.69% higher on the day following Thursday’s recovery move. All 11 major sectors of the S&P 500 trade are trading in the positive territory. Leading the pack is the energy index, buoyed by a 3% increase in WTI crude oil prices.
Traders on the index have largely shrugged off the adverse effects of the hawkish FOMC minutes of Wednesday. Providing impetus to the bullish move is the better-than-expected manufacturing and services PMI by IHS Markit. On Friday, the manufacturing PMI improved from 60.5 to 61.5 (consensus of 60.0), while the Flash Services PMI spiked from 64.7 to 70.1 (versus consensus of 64.3).
The S&P 500 index thus maintains the recovery move, which now appears to have formed a double bottom.
Technical Levels to Watch
Today’s bullish open has violated the 4176.61 resistance. This opens the pathway towards 4200 if the violation turns into a confirmed breakout. 4220 becomes the next target if the advance continues beyond 4200 (28 April and 6 May highs). The all-time high remains at 4238 but needs to give way for the 4260 target set by Credit Suisse two weeks ago to come to fruition.
On the flip side, the downside target at 4150.37 may become available for a retest if the intraday violation of 4176.61 fails. A breakdown of the price below 4150.37 opens the door towards the 4120.48, with 4082.72 and 4032.37 coming into the picture.