- The “risk off” theme that we discussed last week in an article on the FTSE 100 was rejected with a surging rally on Thursdays, shifting the short-term threats to the upside .
- Negative topping patterns (head & Shoulders and Double Tops) have been rejected, whilst stock indices are now pointing at the April cycle peaks.
- This has been driven by hopes of a COVID-19 vaccine, alongside positive soundings from France and Germany in relation to a European recovery fund and to permit the European Commission to borrow money on markets in order to finance the fund.
- Here we focus on the futures contract on the US benchmark average, the S&P 500.
S&P 500 day trade outlook: Bull risks
A surge back topside Monday to just stop short of the April cycle high at 2965.0, at 5964.75, to dismiss the negative pressures from the mid-May plunge through key 2771.0 support to confirm either a Double Top or Head & Shoulders Top, to shift the risk back higher Tuesday.
- We see an upside bias for 2965.0, then 2984.25; a break above here aims for 3000.0, then 3037.0.
- But below 2923.5 targets 2880/74, maybe even towards 2839/37.
S&P 500 intermediate-term outlook
The mid-April push above 2884.75 signalled an intermediate-term shift from bearish to neutral, with a range seen as 3137.0 to 2424.75.
- Downside risks: Below 2620.75 sets an intermediate-term bear trend to aim for 2424.75, 2174.0, 2000.0 maybe 1802.5.
- Upside risks: Above 3137.0 sets an intermediate-term bull trend to aim for 3397.5 maybe 3500.0.
4 Hour S&P 500 Future Chart
