The S&P 500 is trading via its futures value near the 7,568.00 mark as of this writing, on last Thursday the index was near a low of almost 7,235.00, this as another sea change in sentiment has taken place.
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Day traders can be forgiven if they feel confused by the results in the equity markets seen the past couple of weeks. The S&P 500 is near the 7,568.00 mark as of this writing via futures trading, the cash S&P 500 finished Monday’s action at 7,554.28. On Thursday of last week the S&P 500 hit a depth of nearly 7,235.00. A lot of things have happended in a few days.
A sea change in attitudes among financial institutions and speculators has certainly been attained. The announcement that an Iranian agreement is approaching has helped global markets. The price of WTI Crude Oil has nosedived. And now tomorrow’s Federal Reserve interest rate decision appears to be in less danger of seeing a hike. There is also the background noise of SpaceX creating market bedlam on the Nasdaq 100 and the speculative fever it has sparked global traders.
SpaceX is Not Part of the S&P 500
Although SpaceX is not part of the S&P 500 because of a rule that mandates the company must be actively trading for at least 12 months before it can be included in the index, the momentum and sentiment of speculative buying SPCX has created in the marketplace the past two trading days cannot go unmentioned. While just two weeks ago people were speaking openly about fearful knock-on selling influences if SpaceX nosedived, the opposite for the moment has occurred. Risk appetite has been ignited.
The gains on the S&P 500 have been much more polite than the Nasdaq 100’s, but the upwards climb cannot be denied. The S&P 500 is now traversing within sight of record heights seen in early June. Day traders need to remain careful because plenty of risk events lurk, but the positive dose of buying in the stock markets cannot be denied and speculative wagers are certainly the flavor of the day.
Volatility Should be Anticipated
Market conditions will likely remain fast today and tomorrow. Last week’s higher inflation number via the Consumer Price Index spiked fear into many financial institutions.
However, the Fed is now being counted on it appears – to NOT raise the Federal Funds Rate tomorrow.
If all things go smoothly the remainder of the week regarding the Iranian saga and agreement to come, then financial institutions may stay rather positive regarding risk appetite.
The past two weeks of results should be a lesson for everyone to make sure they take into account behavioral sentiment.
The speed that sentiment can change is dynamic in the broad markets.
Day traders are urged to practice solid risk taking tactics and not get overly ambitious today and tomorrow in the S&P 500. Reversals lower can still take place.
S&P 500 Short-Term Outlook:
Current Resistance: 7,570.00
Current Support: 7,555.00
High Target: 7,610.00
Low Target: 7,535.00
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