The S&P500 saw a spike to record highs on Monday with news of a potential coronavirus vaccine from U.S. drugmaker Pfizer. The index has since pulled back to find support but a test of key resistance could see a bullish move higher into the end of the year.
Monday’s Phase 3 trial results saw stocks blast higher as the end of lockdowns came into view sooner than expected. That buzz has faded slightly as traders consider the logistical implication of vaccinating enough of the population to end the lockdowns. A two-day run of record cases in the U.S. has also forced investors to focus on the short-term scenario once again.
This afternoon sees Michigan Consumer Confidence figures released from the U.S. economy with a reading of 82 expected compared to 81.8 in the previous month. Traders aren’t giving too much weight to these indicators with a monthly time lag due to the near-term volatility with virus cases and regulations but a positive consumer would still be a boost for stocks.
The U.S. election picture still hangs in the balance with Donald Trump on the warpath over voting irregularities. He took to Twitter yesterday to slam the Dominion voting system, which he claims deleted 2.7 million of his votes and switched 220k votes from Trump to Biden. It is unclear whether there is any proof to deliver on this but some volatility could still be seen if the case can hold up in the Supreme Court and the country’s mood could turn sour again.
S&P500 Technical Outlook
The S&P500 saw a record high in Monday’s spike and a test of the September 3rd highs around 3588. The index is aiming at this price level again and move higher could see follow-through into year-end. Bullish traders should be wary of a close below resistance with little support available below 3520. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.
S&P500 Daily Chart