The S&P 500 Index continues to struggle to attain new highs, as a slew of negative data battles against positive news surrounding possible breakthroughs in the search for a coronavirus cure or vaccine.
Earlier in the day, Gilead Sciences posted an announcement that its clinical trials of Remdesivir showed a 62% reduction of mortality in severe coronavirus cases, raising hopes that a solution may soon be at hand to help combat the pandemic.
On the other hand, rising cases of the coronavirus in the US, with new record infections recorded almost daily, continue to dampen sentiment. To cap this off, US President Donald Trump has just ruled out further trade deals with China.
Reports monitored from CNBC and Bloomberg indicate that US President Trump told reporters aboard Air Force One Friday that he was not thinking of a Phase Two deal, saying that China’s inactions over the coronavirus pandemic had severely strained relations. This decision could pile on more woes for the S&P 500 index, as it struggles against headwinds that seem to be getting stronger.
Outlook for S&P 500 Index
Despite today’s 0.36% gain as at the time of writing, the S&P 500 has been unable to take out the high of the week posted on Monday at 3182.6. The daily chart shows that over the last two months, the S&P 500 has registered progressively falling highs, which could signal a stall in the uptrend recovery. Meanwhile, the 3137.0 price level continues to provide support for the week’s candles.
A breakdown of this support targets 3070.8, with 3028.3 appearing to be a likely destination for the index if the breakdown move extends further. However, the price must break down the support zone to target the 2844.3 price level.
On the flip side, further recovery of the S&P 500 will have to rely on a break above 3228.4, which would then enable the index to target the 3335.5 resistance level. The 19 February high at 3400 remains a target for bulls.