S&P 500 Starts Higher on Hopes for a Trade Deal

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By Nikolas Papas, Market Strategist at InvestingCube and ATFX.

Wall Street indices started higher the day with the S&P 500 adding 0.55% at 2,908.91. The Dow Jones trading 0.63% higher at 26,327, while the Nasdaq trading 0.89% higher after positive news for China-US trade relations. News reports indicate that China was offering to increase purchases of agricultural products in order to reach a deal. US blacklisted 28 Chinese tech companies and government organisations for their actions against the Muslim minorities in China. In addition, the US Government imposed visa restrictions on officials of the Chinese government and the Communist Party.

Fed chair Jerome Powell, reiterated that the Fed would “act as appropriate to support continued growth, a strong job market, and inflation moving back to our symmetric 2% objective”, leaving the door open for further cuts by the end of the year. Later today will get the minutes from FOMC meeting in September when the Committee decided to cut interest rates by 25bps.

On the data front the United States JOLTS Job Openings came in at 7.051M below expectations of 7.191M in August.

The CBOE Volatility Index or fear index is giving up 5.82% at 1.10 to confirm the positive market mood.

 

S&P 500 Support and Resistance

S&P has formed a strong floor at 2,822 during August which absorbed all the offers and signalled the rebound which almost touched the all-time highs. S&P 500 has cancelled the bullish momentum last week as the index despite today’s gains trades below the 50 and 100-day moving averages. On the upside, immediate resistance is at 2,918 today’s high while more pressure will be met at 2,929 the 100-day   moving average before an attempt to 3,027 the all-time high. On the downside S&P 500 first support stands at 2,908 today’s low and then at 2,848 the 50-day moving average. Traders looking to enter long positions can buy if the index closes above today’s high, targeting the 3,100 level for profits, and can keep their long positions as far the index is trading above the 2,900 mark.

The European indices trading higher, the FTSE 100 is 0.31 per cent higher at 7,165 as the pound trades above 1.2223. DAX index trading 0.99 per cent higher at 12,089 while CAC 40 in Paris also trading 0.67 per cent higher at 5,493.

Nikolas Papas has been in the finance industry for over fifteen years in roles spanning across Europe and USA and has acquired in-depth knowledge and experience within many aspects of the financial markets. His work can be seen on Investingcube.com.

 

 

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