Upbeat data from the US have so far failed to ignite any positive sentiment on the S&P 500. Existing home sales came in at 5.86 million, which trumped market estimates of 5.40 million and exceeded the previous month’s figure of 4.70 million. Similarly, Flash Manufacturing PMI data from Markit indicate that private sector manufacturing output soared to 53.6, better than the 51.9 market estimate and also higher than last month’s revised figure of 50.9.
However, it would appear that investors on the S&P 500 index want much more, and this could come from the negotiations between Democrats and Republicans on an enhanced stimulus package for families and small businesses. So far, these talks have failed to deliver anything tangible, allowing the S&P 500 to be a casualty of falling T-bond yields which have dragged the financial shares on the index lower.
Energy stocks are also underperforming after WTI crude ticked lower for the 2nd day in a row. The S&P 500 is trading at 3386.3 for a gain of 0.04% so far.
Outlook for S&P 500
The technical picture on the S&P 500 daily chart remains unchanged. 3399.5 remains the all-time high, and this is the price level that bulls need to exceed to create the higher highs needed to restore recovery. Such a move also invalidates the wedge pattern and sends the S&P 500 into new record territory.
On the flip side, a rejection at the current resistance area for the 5th day in a row may lead to a more considerable selloff, which targets the 3335.5 support. Furthermore, support targets at 3282.2, 3228.4 and 3137.0 continue to remain relevant to the current price picture, as do 3070.8 and 3028.3.
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S&P 500 Daily Chart
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