S&P 500 boosted by bullish sentiment

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The S&P 500 Index rose on Wednesday, continuing the rally from the previous day’s session as Federal Reserve comments were treated as mildly dovish by stock market traders.

The Fed opted to keep interest rates at record lows and more importantly, gave no clear sign that rates would rise this fall. This is now the 53rd consecutive meeting where the bank has left rates unchanged. It’s also been ten years since the Federal Reserve last increased the headline base rate which continues to rest between 0% and 0.25%.

As a result, stock markets finished up. The S&P 500 moved steadily higher and closed up by 0.73%, hitting 2,108.57 by 4.30 PM in New York and outperforming both the Dow Jones Industrial Average (up 0.69%) and Nasdaq (higher by 0.44%).

Industrials, Energy and Basic Materials led gains in the S&P although all ten sectors finished in the green.

Performers

Top performer on the S&P 500 on Wednesday was Citrix Systems Inc. The business software technology company handily beat earnings expectations and saw its shares surge by 8.3%. The firm also reported a deal with Elliott Management which will involve the activist investment corporation taking up a seat on the Citrix board.

Worst performer on the index went to Level 3 Communications Inc. The Colorado based telecommunications services business released worse than expected earnings and dropped 6.13% to close just above $49 a share.

Technicals & Outlook

The S&P 500 opened just below it’s key pivot level on Wednesday and made steady progress throughout the session. The market spiked higher during the Fed announcement then proceeded to build on gains, finishing near intraday highs.

Looking ahead, we note that most indicators are mixed and the Elliott wave is wave a (circle) up of the final zigzag pattern on the short-term horizon. We are looking to buy here for a potential move up to 2,115 or higher. Sentiment as indicated by our BTI has turned bullish.

We are also bullish over the next few weeks and feel the move could extend to 2,150 on the upside.

Thierry Laduguie is Trading Strategist at www.bettertrader.co.uk

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