Global stock outlook improves (S&P 500 forecast)

Intermediate
  • Stock indices have posted strong gains to start this week, rallying to new recovery high as coronavirus new cases/ deaths have shown some signs of slowing down in some US States (NY State) and in some parts of Europe (Italy and Germany).
  • This has rejected the “risk off” theme from the start of April last week, with global share averages rejecting the prior moves lower (see our report last week on the DAX)
  • Here we focus on the future on the US benchmark index, the S&P 500 future.

 

S&P 500 future trade outlook: Threat lower, despite bounce

A push higher overnight into Monday above 2591.25 resistance and then still higher through the session above the 2635.75 recovery high to 2668.5, to reject negative pressures from the early April plunge through the interim low at 2445.0 (to signal a Double Top pattern), to switch risks higher into Tuesday.

·      We see an upside bias for 2649.0 and 2668.5; a break above aims for 2697.25, maybe towards 2735/36.

·      But below 2586.0 targets 2564.0, which we would look to try to hold. Below targets 2541.5 and 2511.0.

S&P 500 future intermediate-term outlook

The latter February plunge below 3303.5 signalled an intermediate-term bearish shift.

  • Downside risks: We see an intermediate-term bear trend to aim for 2000.0 maybe 1802.5.
  • What Changes This? Above 2884.75 sees an intermediate-term neutral range and above 3137.0 a bull trend.

Daily S&P 500 Future Chart

SP 500

Editor in chief

Steve Miley has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Market Chartist, the Editor-in...continued

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