US Market Roundup: Stocks Higher Despite Slightly Weaker US Economic Numbers

US Stock traded higher despite a 3-hour trading disruption in the Nasdaq Stock Market. S&P 500 gained 0.86%, while Dow 30 added 0.44%. Nasdaq 100 was the surprise black horse, closing 0.99% higher at the end of the day without any significant pullback. Bulls pushed the Nasdaq 100 index immediately higher when trading resumed, allowing price to close near to the day highs above 3,100 round figure. This highlighted the strong bullish momentum surrounding US stocks yesterday, with all 3 mentioned major indexes gaping higher and pushing further up despite higher than expected Jobless Claims numbers. Markit US PMI data was also lower than expected, coming in at 53.9 vs 54.2 expected. On the Housing Market front, latest House Price Index came in at 0.7%, slightly higher than the 0.6% last month. However, Q/Q number is lower than expected at 2.10% vs 2.45%, and it is lower than previous quarter’s 2.26%. On balance, it seems that US news weren’t bullish, and yesterday’s rally could simply be a pullback of Wednesday’s decline, or perhaps a revaluation by stock traders to favor long-term bullishness of QE tapering instead of focusing on Short-term pain.

S&P 500 Hourly Chart


Whatever the case may be, it is clear that the rally is significant. For the S&P 500, prices managed to clear above the 1,650 round figure and 1,655 ceiling in one swift move. However, it should be noted that overall bearish pressure remain as the ultimate ceiling for current consolidation which is hanging around 1,665. Furthermore, Stochastic readings are at their highest overbought levels in a week, with bullish momentum looking weaker as compared to the strong rallies seen during US off-market hours. As such, it seems highly plausible that price may be rejected at 1,665 (should we ever get there) even though sentiments may ultimately send price higher in the long run.

Dow 30 Hourly Chart


This bearish notion is even clearer via the bearish twin Dow 30. Prices have failed to reach 15,000 and is now approaching the descending trendline that has been in play since the start of the week. Similar to S&P 500, Stochastic readings are overbought, but ironically to a lesser extend despite being the more bearish one. Nonetheless, the interpretation remains the same – it is likely that prices will be rebuffed by the combination of descending trendline at 15,000 resistance. If broad sentiment remain bullish, support can be sought from 14,900 to 14,930 and allow for a re-test of the aforementioned resistances once again.

Comparing both indexes, should Dow 30 break the 15,000 level, the case for S&P 500 reaching 1,680 resistance increases. In similar vein, a break of 1,650 for S&P 500 would mean a higher likelihood of Dow 30 reaching 14,830 and potentially further below by virtue of it’s higher bearishness.

More Links:
GBP/USD – Pound Loses Ground After Fed Minutes Release
USD/CAD – Canadian Dollar Drops As Retail Sales Falter
AUD/USD – Aussie Struggling Close to 0.90 Level

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Mingze Wu

Mingze Wu

Currency Analyst at Market Pulse
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu