Current trend

The S&P 500 stock index is growing to 5841.00 amid positive macroeconomic data and in anticipation of a cut in the US Fed interest rate.

Thus, the volume of core durable goods orders increased by 0.4% MoM, exceeding the forecast of –0.1%, the October consumer expectations index from the University of Michigan amounted to 74.1 points compared to preliminary estimates of 72.9 points, and the consumer sentiment index was 70.5 points against 68.9 points. Now market participants are awaiting the publication of the key US labor market report for October at the end of the week: analysts expect a slowdown in the number of new jobs outside the agricultural sector in October from 254.0K to 140.0K, and average hourly earnings from 0.4% to 0.3% MoM, while the year’s rate of the indicator may remain around 4.0%, and the unemployment rate at 4.1%, allowing monetary authorities to continue their “dovish” course at the meeting on November 7. According to the Chicago Mercantile Exchange (CME) FedWatch Instrument, the probability of an interest rate adjustment by –25 basis points is 96.5%, which will be a positive signal for the stock market, as the attractiveness of the dollar will decrease, and investors will switch their attention to the stock market. If the economy continues to recover, the S&P 500 can reach 6000.00 in the medium term. The long-term trend is upward: in October, the price reached the resistance level of 5830.00. In case of consolidation above it may reach the area of ​​6000.00 and 6150.00. In the case of holding 5830.00, a correction and a test of the support level of 5864.00 are likely, where long positions, with the target at 5830.00 are relevant. Overcoming the support level of 5864.00 will allow the asset to reach the area of ​​5410.00. The medium-term trend remains upward: at the end of September, the quotes overcame zone 2 (5673.00–5645.00) and headed towards zone 3 (5949.00–5921.00). Now, a correction is developing, as a result of which it is likely to test the key trend support area of ​​5605.00–5577.00, where long positions, with the target at the October high of 5880.00 are relevant. In case of a breakout of zone 3, the asset may reach zone 4 (6225.00–6197.00).

Support and resistance

Resistance levels: 5830.00, 6000.00, 6150.00.

Support levels: 5684.00, 5410.00, 5170.00.

Trading tips

Long positions may be opened from 5684.00, with the target at 5875.00 and stop loss 5620.00. Implementation period: 9–12 days.

Short positions may be opened below 5620.00, with the target at 5410.00 and stop loss 5715.00.