S&P 500 Index At Fresh Record High, Trade Deal Details in Spotlight

Summary:
• S&P 500 hits fresh record highs before the signing of the phase one trade deal later today which indicates that the trade war has come to a pause

S&P 500 hits fresh record highs before the signing of the phase one trade deal later today which indicates that the trade war has come to a pause and the US-China relations have entered a new predictable cycle. China’s Vice Premier Liu He said that would work with the USA to follow through on deal after signing of phase-one. The White House economic adviser Kudlow said that If China does not meet targets on purchases, it will trigger the dispute resolution mechanism.

The NY Empire State Manufacturing Index improves to 4.8 in January from 3.3 in December beating the expectations of 3.55. The Producer Price Index (month over month) came in at 0.1%, below the estimates of 0.2% while the yearly reading came in at 1.3% in line with forecasts. The PPI ex Food & Energy registered at 0.1% below market consensus of 0.2%.

Read our Best Trading Ideas for 2020.

S&P 500 Bulls in Control

S&P 500 adds 0.28% at 3,298 as bulls are in full control and drive the index to one record after the other. Nothing can change the perfect upward momentum since last October. Even when we came close to war between Iran and USA the index retreated   for one day and continued with another high.

Resistance will be met at 3,299.4 the daily high. S&P 500 next level to watch is the 3,350 psychological mark.

On the downside, the intraday low at 3,279 will offer the first support for the index.  A break below might attract more sellers for a move down to 3,265 the low from January 13^th. If bears pierce this level, then the way will be open for a move down to 3,183 the low from January 8^th.