What’s inside:
- Global risk appetite healthy to start the week
- SP 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 SP 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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SP 500: Daily
—Written by Paul Robinson, Market Analyst
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