S&P500: Returns upward trend _11/05/2016

Trading recommendations

Sell ​​Stop 2070.0. Stop-Loss 2083.0. Objectives 2064.0, 2056.0, 2041.0, 2023.0, 2000.0

Buy Stop 2085.0. Stop-Loss 2075.0. Objectives 2100.0, 2108.0


Technical analysis

On the daily chart indicators OsMA and Stochastic recommend long positions. However, on the 4-hour chart are deployed on short positions.

Since mid-April, when the S & P500 index updated yearly highs near the mark 2108.0, blocking incurred since the beginning of the year the losses observed in the correction of the rising channel on the daily chart.

Declining correction halted on Friday after the release of weaker than expected data on the labor market in the US in April. The number of new jobs in April amounted to 160 000, instead of the expected growth of 200,000 in March and the growth of 208 000, which is somewhat dampened expectations of a speedy next interest rate increase in the US market.

Hang up happened on the level of support 2041.0, through which the EMA50 and the lower line of the rising channel on the daily chart. Yesterday's growth index was one of the strongest in the last month, reaching 1.2%, or 25.7 points.

After "working off" indicators on the 4-hour chart and turn them into long positions can be back to shopping index. Pending buy orders can be placed at the level of support 2064.0 (EMA144), 2056.0 (EMA200 on 4-hour chart), 2041.0 (EMA50 and the lower line of the rising channel on the daily chart). The purpose of growth may be the level of 2108.0.

Alternative scenario implies a breakthrough of support level for the purpose of 2041.0 2023.0 (EMA200, EMA144 on the daily chart). Breakthrough strong support 2000.0 (Fibonacci level 61.8% decrease from December 2015) will increase the risk of further decline of the index, and return to the downward trend.

However, a more preferred long positions.

A break of resistance area near the level of 2083.0 will create conditions for the further growth of S&P500 index.

Support levels: 2064.0, 2056.0, 2041.0, 2023.0, 2000.0

Resistance Levels: 2083.0, 2100.0, 2108.0


Overview and Dynamics

To date, the S&P500 is fully regained all the losses incurred since the beginning of the year. Positive medium-term dynamics of the index and the growth is likely to remain at the background of subdued expectations about interest rate rises in the United States.

Rising oil prices Tuesday contributed to the growth of the US stock market and the growth of stock indices. So, Dow Jones Industrial Average on the basis of trades rose by 222.44 points, or 1,3%, Nasdaq Composite - at 59.67 points, or 1,3%, S&P500 - at 25.70 points, or 1.2%. Recently, after a sharp drop and recovery in this year's daily changes in stock indexes were small, no more than 1% on average. Therefore, yesterday's growth stands out, and in percentage terms was the strongest since March 11th.

Severe fires in Canada have forced some companies, the leading mining in the region, lower oil production, which accounted for over 25% of the pan-Canadian oil production. Canada is the largest supplier of oil to the world market, and in proven reserves of crude oil is the third in the world after Saudi Arabia and Venezuela. The decline in oil production in Canada totaled about 1.6 million barrels a day, or more than 1% of the global supply. At the same time, Canada is a major exporter of oil to the US.

The rise in prices for shares of energy companies included in the S & P500, amounted to 1.8%, more than in any other sector. All 10 sectors as a part of S&P500 index rose on Tuesday.

Today, the economic news calendar meager. According to yesterday's report of the American Petroleum Institute (API), released late in the evening, US crude stocks rose by 3.4 million barrels to a new historic high. Today at 14:30 (GMT) Ministry of Energy report is supposed to be about the growth of oil reserves last week to 714,000 barrels.

Growth of oil will curb rising oil prices. However, most likely, after yesterday's strong growth should be expected to reduce the S&P500 index on profit and decrease of oil prices in anticipation of the publication of the US data on oil stocks.

 The growth of gold prices today and the demand for the yen also indicate the propensity of investors to risk avoidance and purchases of risky assets the stock market.