SPX500 commenced the day positively with a net gain of $39.05 added to the previous payments of yesterday after the dollar index picked up again, returning above 107 during the Asian session today. The price is currently ranging at $3982.8. Investors remain optimistic as they await the Flash Services PMI report to be released today, which will determine the next direction for this US primary stock index.
The flash service Purchasing Managers Index (PMI) is essential data that considerably influences the stock and index market. This data gives an index figure of the diffusion level and purchasing managers’ purchasing decisions in the general service industry. The Flash Service PMI is essential to the country’s economic health. Often investors reacted quickly to the report from this data which means; high volatility will be expected for SPX500 today depending on the outcome of this data. A higher reading from this data suggests the US economy is still healthy, and the Purchasing Managers can carry on with their production activities. This means more jobs will be further created too. This will trigger more gains for SPX500 as more investors will be expected to invest in the US stock and index market. Especially once there is proof of a healthy economy from the PMI report. A lower reading from this data will spell doom instead for SPX500. This will indicate an unhealthy economy forcing investors to vacate the scene. The forecast for this data is 52.6, while the previous record was 52.7. The result must stay above 50 to provide confidence that the economy is not falling into recession.
Judging from the performance of SPX500 yesterday after the news of an interest rate hike for the Euro, one would conclude that investors seemed to have more hopes for the US economy than any other. Hence, the bulls pushed higher yesterday on the US stocks and Index market, bringing SPX500 to its current high price level and continuing to the present.
Observing the current bullish momentum for SPX500, one could project that the next target for this index is at the upper resistance at $4102.2. A break above this level will give room for higher levels, with the next target as $4168.6. Alternatively, should the current bullishness be defeated from a lower PMI reading, then we might experience a retest of the lower support at $3821.9. A break below will land the index price at $3684.3.
Investors are encouraged to utilise a proper risk management strategy on those days when high volatility is expected in the market.
