S&P 500: Trims Monday’s losses and more, reclaims the 4,700 figure on upbeat US economic data

• The S&P 500 advances up 0.51%, at 4,706.87.
• The Dow Jones climbs 0.50%, currently at 36,270.40.
• The heavy-tech Nasdaq Composite edges higher 0.65%, at 15,957.49.

The S&P 500 edges higher during the New York session, up some 0.51%, currently at 4,706.87 at the time of writing. As portrayed by major US equity indices, the market sentiment is upbeat, rising between 0.50% and 0.65%. Positive US macroeconomic data spurred a rally in US stocks, as the Retail Sales jumped to a seven-month new high, doubling September reading.

In the New York session, the US Retail Sales for October were unveiled, showing an increase of 1.7%, more than the 1.4% estimated by analysts, smashing the 0.8% September’s number. Moreover, excluding Autos, sales for the same period expanded at the same pace that the headline, 1.7%, higher than the 1% expected.

Consumers propelled sales to their most significant jump in seven months. However, it is worth noticing that the figures are not adjusted for price changes due to higher prices. In some gasoline stations, the receipt heightened almost 4%, its highest level since March, portraying the spike in energy prices in the last couple of months.

Sector-wise, consumer discretionary, technology, and health advance 1.29%, 0.90%, and 0.73%, respectively. On the other hand, the main losers are utilities, real estate, and consumer staples, down 0.48%, 0.47%, and 0.42% each.

S&P 500 Price Forecast: Technical outlook

The daily chart depicts the S&P 500 has an upward bias, confirmed by the daily moving averages (DMA’s) well located below the index value, with an upward slope. Nevertheless, the Relative Strength Index (RSI) is at 70, well within overbought conditions, suggesting that a lower correction could happen. 

At press time, is testing the all-time high at 4,716, which in case of a daily close above the latter, would expose the 4,800 as its following resistance area. 

On the flip side, in the case of a correction, the first support would be the October 26 high at 4,598.53 that confluences with the 78.6% Fibonacci retracement as the first support level. In the outcome of a deeper correction, the October 27 low at 4,553.53.