The S&P 500 bounced on Monday, and today it’s going to open much higher after the CPI data. Will the uptrend resume?
The broad stock market index gained 1.43% yesterday, as it went the highest since last Tuesday. Last week on Monday it reversed lower after a better-than-expected ISM Services PMI release, and on Tuesday it was as low as 3,918.39 (going down from its last week’s local high of 4,100.51).
This morning the S&P 500 will likely open 2.7% higher following lower-than-expected Consumer Price Index release. The market will be now waiting for tomorrow’s FOMC release. It still looks like a weeks-long consolidation within an uptrend. However, last week on Tuesday the index broke below its two-month-long upward trend line, as we can see on the daily chart:
Futures Contract Rallies to New High
Let’s take a look at the hourly chart of the S&P 500 futures contract. It broke above the previous local highs on the inflation release. The support level is now at 4,050-4,100, marked by the recent resistance level.
Conclusion
Stocks are about to open much higher this morning on lower than expected consumer inflation release. So the S&P 500 index will likely get back above the 4,000 level. Tomorrow we will have the important FOMC release, and there will likely be even more volatility.
Here’s the breakdown:
- S&P 500 index got close to the 4,000 level yesterday, and today it will break above it.
- Stock prices may resume their two-month-long uptrend.
Thank you.
Paul Rejczak,
Stock Trading Strategist