The S&P 500 index is back close to the closing levels of Monday, as are other US indices. This follows a strong rebound during the session after initially opening lower.
The resurgence in bullish action followed strong gains from energy shares, as expectations for the OPEC + alliance to further extend existing production curbs heighten.
The lack of direction can also be explained by the attitude of investors, who prefer to sit on the fence and watch to see where the slew of economic data from the US would swing. A significant market catalyst could come from the employment data (ADP employment change, initial jobless claims and NFP), or the speech by Fed Chair Jerome Powell. The ISM Non-Manufacturing PMI survey is also on the cards.
As of the time of writing, the S&P 500 Index was trading flat at Monday’s close of 3906.4.
Technical Outlook for S&P 500
Today’s decline on the S&P 500 was rebuffed hard at the 3870.0 support level, sending prices back to the market open price. This leaves the descending trendline resistance intact, potentially stalling further upside moves on the index.
However, a break of this trendline allows the bulls to march towards 3950.4 (the all-time high), to break past that level and open the door for a possible push towards 4005 (161.8% Fibonacci extension on the daily chart).
On the other hand, a decline from the trendline puts 3870.0 at risk of being taken out. A breakdown of that price level clears the pathway towards 3823.9, with 3765.1 and 3721.2 lining up as additional targets to the south.
S&P 500 Daily Chart