S&P 500 Technical Outlook: More of the Same for Now
- U.S. indices continue relentless rise into record territory
- S&P 500 has two trend-lines in focus; one as support, the other as resistance
- FOMC meeting minutes tomorrow, otherwise calendar light.
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The relentless rise in the U.S. continued on Friday with new record closes in the major indices; the S&P 500 has tacked on about 13% since it bottomed ahead of the U.S. presidential election in November. As we said last week, the market appears to be in a ‘blow-off’ stage. When and where it stops is difficult to predict, but risk is clearly rising for fresh long positions, however; shorting isn’t an appealing proposition in the least bit.
The S&P is currently between two trend-lines rising up from the low in November and one extending back to the Feb low last year. The latter is viewed as support on any minor dip from here, while the steeply rising November trend-line is viewed as potential resistance with further strength. We will continue to run with the trend, but are on alert for a sign of exhaustion and potential reversal.
Tomorrow, at 19:00 GMT the FOMC minutes from the Jan 31/Feb 1 will be released – a potential source of volatility, but not expected to rock the boat too much. Outside of the minutes the calendar is lacking in terms of scheduled high impact events this week. See the economic calendarfor events on the docket.
S&P 500: Daily
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---Written by Paul Robinson, Market Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.