Strong retail sales data and a larger-than-expected slump in the initial jobless claims figures provided a double-barreled pump to the S&P 500 index, as it soared to new all-time highs on Thursday.
Retails sales for March 2021 rose sharply, hitting 9.8% (versus the previous figure of -2.7% and consensus of 5.8%) to set off a strong start to the S&P 500 index. Initial jobless claims fell from a revised number of 796K last week to 576K this week, which was lower than the market estimate of 703K. This marked the lowest this number has been in a year.
Technical Outlook for S&P 500 Index
The daily candle is marching towards the psychological resistance at 4200, which was predicted to be the next logical upside target by Credit Suisse in their outlook piece two weeks ago. This is expected to be the initial barrier that must be overcome for the S&P 500 to target the 200% Fibonacci extension point at 4301.0.
On the other hand, a pullback initiated by profit-taking brings the 38.2% Fibonacci retracement point from the swing low marked as point C on the “W” pattern to the swing high marked as D into the picture. This price level so described lies at 4049.5, with the next downside targets located at 4011.3 and 3973.2 (61.8% Fibonacci retracement and 29 March high. Additional downside targets lie at 3950.1, 3910.5 and 3870.0. Any of these levels could mark a dip-buying point for bulls looking for cheaper re-entries into the uptrend.
S&P 500 Index; Daily Chart
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