It reached new local high of 4,508.67 and it was the highest since mid-September. Recently the index broke above the resistance level marked by the technically important September 21 daily gap down of around 4,376-4,401. Stocks rallied despite uncertainty about monetary policy, economic growth and geopolitics. The market resumed its rally from October 27 local low of 4,103.78.
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See all US Dollar Index forecastsStocks will likely open 0.3% higher this morning following lower-than-expected PPI release and higher-than-expected Retail Sales, Empire State Manufacturing Index releases. The S&P 500 is now close to the 4,500 level as we can see on the daily chart:
Futures Contract Trades Above 4,500
Let’s take a look at the hourly chart of the S&P 500 futures contract. The market accelerated the rally and it broke above the 4,500 level yesterday. The resistance level is now at around 4,550-4,570, marked by the previous local high. On the other hand, the support level is at 4,480-4,500.
Conclusion
The S&P 500 index has further accelerated its uptrend on positive economic data, weakening U.S. dollar. There have been no confirmed negative signals so far. However, there are short-term overbought conditions that may lead to consolidation or a correction at some point.
Here’s the breakdown:
- The S&P 500 trades along the 4,500 level following yesterday’s CPI release.
- There may be a consolidation or downward correction at some point.
- In my opinion, the short-term outlook is still bullish.