S&P 500 (SPY) Tests 4100 As Commodity Markets Rally

Key Insights

• S&P 500 is up by almost 1% today amid growing appetite for risk.  
• Silver-related stocks enjoy strong support as silver is testing the $20.00 level. 
• A move above 4115 will push S&P 500 towards the resistance at 4150.

Traders Stay Optimistic

S&P 500 continues its attempts to settle above the 4100 level as the strong rebound continues.

S&P 500 faced resistance near 4115 and pulled back towards the 4100 level, but there are no signs of a serious sell-off, which could be triggered by profit-taking after the strong rally.

While the markets have priced in an almost 90% probability of a 75 bps rate hike at the next Fed meeting, stock traders remain in a bullish mood. Treasury yields are mostly unchanged today, but weaker dollar provides additional support to stocks.

S&P 500 is trying to settle back above the 4100 level. In case this attempt is successful, it will move towards the next resistance level, which is located near daily highs at 4115. A move above 4115 will push S&P 500 towards the resistance at 4150. If S&P 500 gets above this level, it will head towards the resistance at 4180.

On the support side, a move below the 4100 level will open the way to the test of the support at 4080. In case S&P 500 manages to settle back below this level, it will head towards the next support at the 50 EMA at 4050.

Commodity-Related Stocks Rally

Commodity-related stocks enjoy strong support at the start of the week as commodity markets rally.

Silver miners like First Majestic Silver, Endeavour Silver, and Pan American Silver, are up by 5-7% in today’s trading.

Major oil-related stocks like Exxon Mobil and Schlumberger are also gaining ground as WTI oil is up by more than 2%.

Leading tech stocks are mostly moving higher in today’s trading. Apple is the clear leader as the stock is up by more than 3% amid reports about strong pre-order demand for iPhone 14.

From a big picture point of view, the current upside move is broad, and all market segments are moving higher. While S&P 500 is up by about 5% in just four trading sessions, traders’ appetite for risk remains strong.

Traders will need to monitor the developments in currency markets today as the weak dollar provides significant support to S&P 500. In case the U.S. Dollar Index manages to settle below the 108 level, stocks will have a good chance to finish the trading session near daily highs.

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