S&P 500 (SPY) Rebounds From Session Lows As Energy Stocks Rally

Key Insights

• S&P 500 failed to settle below the support level at 3725 and moved back towards the 3775 level. 
• Energy stocks enjoyed strong support as WTI oil tested new highs. 
• A successful test of the resistance at 3775 will push S&P 500 towards the next resistance level at 3800.

Traders Buy Stocks After The Pullback At The Start Of The Trading Session

S&P 500 received support near 3725 and moved away from session lows as traders were willing to buy the intraday pullback.

Today’s ADP Employment Change report indicated that private businesses added 208,000 jobs in September, mostly in line with the analyst consensus of 200,000. Tomorrow, traders will focus on the Initial Jobless Claims report, which is expected to show that 203,000 Americans filed for unemployment benefits in a week. The market will remain extremely sensitive to job market data as it has a material impact on Fed’s decisions.

Energy stocks are leading the intraday rebound. OPEC+ decision to cut production by 2 million bpd provided significant support to oil markets. Schlumberger, Exxon Mobil, and Halliburton are among the biggest gainers today.

Higher Treasury yields have put significant pressure on REITs like Vornado Realty, Boston Properties, and Ventas. REITs will remain extremely sensitive to changes in yields. Traders are worried that higher yields will hurt the whole REITs segment, and many REITs are testing new lows.

Leading tech stocks like Apple, Microsoft, and Amazon are losing some ground in today’s trading session, but it should be noted that these stocks have mostly closed the gap and are trading near daily highs.

From a big picture point of view, the market received strong support after the initial wave of selling which was triggered by profit-taking. S&P 500 has a decent chance to finish the trading session in the positive territory.

S&P 500 Tests Resistance At 3775

Currently, S&P 500 is trying to settle back above the resistance at 3775. In case this attempt is successful, it will move towards the next resistance level at the 20 EMA at 3800. A move above the 20 EMA will push S&P 500 towards the resistance at 3830. If S&P 500 climbs above this level, it will head towards the resistance at 3885.

On the support side, S&P 500 needs to get back below 3775 to have a chance to gain downside momentum in the near term. The next support level for S&P 500 is located at 3750. A successful test of this level will push S&P 500 towards the support at 3725.

For a look at all of today’s economic events, check out our economic calendar.