Futures on the S&P 500 are pointing to a higher open today, which could help the index soar to new highs after China announced moves to contain the coronavirus infections in the country. The S&P 500 was also boosted by strong earnings from IBM as well as the generally upbeat report from Netflix that showed a greater-than-expected addition to its international subscriber base.
IBM share price posted a 4.4% premarket gain after it predicted a better-than-expected full year profits, driven mainly by its cloud-computing business. Netflix added 13 million new international subscribers, which offset its 177,000 domestic subscriber shortfall and helped it gain revenues of $5.47 billion, which was marginally better than the $5.45 billion that the markets expected.
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The outlook continues to show that bullish pressure persists in the market. The coronavirus market contagion that crept in on Monday seems to have been contained by the slew of upbeat earnings from US companies. This is now causing the S&P 500 to push against the resistance located at 3335.7.
A break of this resistance area targets new all-time highs, with the 161.8% Fibonacci extension level which lies above 3450 as well as the top ray of the pitchfork all being potential targets.
On the flip side, failure to break the 3335.7 resistance level could lead to a pullback which targets 3263.5 (100% Fibonacci extension level) or possibly the 4 Nov 2019 high at 3117.3 price level. Further below, additional support lies at the 15 July and 16 September 2019 highs at 3018.5.
The CNN Fear and Greed Index has pulled back to 81, which indicates that even though extreme greed still runs among traders in the US markets, a sizable portion are starting to become wary of chasing new highs. Watch for a review of this week’s CNN Fear and Greed Index tomorrow on this site.