S&P 500 Technical Analysis: Looking to Put Bearish Scenario to Rest
- Global risk appetite healthy to start the week
- S&P 500 looking to put to rest one bearish possibility
- Break above 2480 clears path to new record highs.
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Recently we’ve made mention of one possible bearish scenario – ‘head-and-shoulders’ top. The keyword being, “scenario”. This is what we had to say in our weekly equity market forecast, “There is still a small possibility we see a ‘head-and-shoulders’ top come to fruition, but until we see the market pick up steam to the downside and solidify the ‘right shoulder’ it’s only a passing scenario at this time. Appetite for risk remains stable and with that a move towards new record highs still has good odds.”
To start the week in Asia and Europe we are seeing good buying, as the Nikkei closed up 1.41% and the DAX and CAC are each sporting 1%+ gains at this time. Both of those key European indices are also breaking above key thresholds.
U.S. index futures are indicating a strong open at the time of this writing, with the S&P 500 trading higher by 12.50 handles to 2473.50, Dow rising 115 to 21893, and the Nasdaq 100 contract up 42.5 to 5967.
With a little more buying the 9/1 Friday high at 2480 will likely get exceeded, opening up a path for the intra-day record high at 2491. A clean break to new highs could bring into play a top-side trend-line which at this time doesn’t arrive until ~2520/30. A failure today would of course put pause into this notion, but at this time there still looks to be another leg higher coming in the market. A failed move higher followed by a break of last week’s low at 2446 would have us shifting into reverse, at least temporarily.
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S&P 500: Daily
---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.