The S&P 500 in early futures trading this morning is near 6,511.00, this after touching a record value of nearly 6,540.00. Speculators within the S&P 500 appear to remain fixated on continuing to challenge apex heights.
Trading in the S&P 500 continues to be one of the most important venues for day traders. The ability of the S&P 500 to touch a record value on Friday and remain within sight of its apex highs early this morning via futures trading, shows that investors and speculators remain intrigued by the potential of additional gains. While the Nasdaq 100 has shown signs of fatigue at times the past couple of months, the S&P 500 continues to glimmer as its big board of large corporations remains seductive.
Certainly the S&P 500 does trade lower too. Day traders should not be tricked into blind one sided wagers. After reaching record values on Friday the S&P 500 rapidly moved lower to 6,450.00. Volatility in the S&P 500 and its prospect needs to be given respect by speculators. However, true to recent form the S&P 500 did recover from its fast selloff and began to incrementally climb again.
Buying Attitudes Mixed with Caution
Tomorrow and Thursday will see important U.S inflation reports via the PPI and CPI statistics. Investors will be on guard for the results that will be published and react to the outcomes. Mid and long-term players in the S&P 500 continue to show signs of looking for higher yields via the index, this as 10 Year U.S Treasuries have seen their yields decline. The Federal Reserve is expected to cut its interest rate in September. Depending on the inflation results tomorrow and Thursday, the Fed may also feel inclined to cut the Federal Funds Rate in October.
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Day traders who are tempted to use technical support as a way to look for upside in the S&P 500 cannot be faulted. The bullish trend in the index has been rather strong since the 2nd of September, but dangers do lurk. Behavioral sentiment in the S&P 500 appears to have significant influence via investors who might feel the index offers the best place to seek ‘conservative’ ways to achieve yields over the mid-term. The 6,520.00 ratio looks technically as important short-term resistance, if this level is toppled and sustained it could prove an interesting signal.
Sustained Highs and Looking for New Summits
The ability of the S&P 500 to produce new highs is attractive, but as last Friday proved when apex levels are hit sometimes strong selling does follow.
- U.S economic data is rather mixed, employment numbers have been weaker, and there is a fear among many analysts that inflation will creep back into the economy.
- However, sentiment is driving the S&P 500 higher for the moment and this cannot be discounted by day traders.
- Those who are tempted to fight the trend and look for short-term selling to develop can definitely do so, but it should be done with strict risk taking tactics.
- Tomorrow’s Producer Price Index results via its inflation statistics will cause market movement.
S&P 500 Short-Term Outlook:
Current Resistance: 6,517.00
Current Support: 6,503.00
High Target: 6,540.00
Low Target: 6,485.00
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