- Summary:
- The S&P 500 index opens the week on a bullish note as President Trump signs emergency executive order to extend unemployment benefits.
The S&P 500 index has had a slightly bullish open to the week, driven upwards by rising energy shares as well as guarded market optimism as President Trump signed four executive orders, including an extension of the federal unemployment benefits.
Rising energy shares, listed in the S&P 500 Energy Index, were more than 1% in the green as crude oil prices on the WTI benchmark rose slightly on the day. However, the upside on the S&P 500 was muted, as investors displayed cautious optimism, as Democrats and Republicans failed to reach a compromise on extending the stimulus packages to families and the unemployed on Friday. Assurances on a possible deal with Democrats
by US Treasury Secretary Steven Mnuchin on a CNBC interview on Monday failed to reassure investors.
The markets have had to rely on President Trump’s use of an emergency supplemental program to extend federal jobless benefits at a rate of $400 a week, as well as to reduce payroll taxes. This emergency window is only open for five weeks but buys enough time for the Democrats and Republicans to work out a consensus on the enhanced stimulus packages.
The S&P500 is currently trading at 3358.7, or 0.22% higher on the day as at the time of writing.
Technical Outlook for S&P 500
The 3335.5 resistance was broken last week, courtesy of a double successive penetration close by the Thursday and Friday daily candles above this price level. However, the upside appears limited by the upper border of the rising wedge. The technical expectation here is for the price to be rejected at that area. This makes a case for a price push southward, with the possibility of a downside break that would complete the pattern. If such a move is actualized, the price action would need to take out the 3333.5 and 3228.4 support levels, with the latter only being achievable on a breakdown of the wedge. 3137.0 lies further south, as does 3028.3.
On the flip side, upward extension towards the 3401.1 price level achieves a move towards the psychological resistance, and also reclaims the 19 February 2020 all-time highs.
S&P 500 Daily Chart
