SPX Price Target Revisions and Analysis
Stocks finished Wednesday with modest losses which steepened towards session close as Wall Street digested weaker-than-expected new-home sales in July and further weakness in the 10-year Treasury yield. 10-year Treasury yield eased 4 basis points as traders await speeches from Fed Chair Janet Yellen and European Central Bank President Mario Draghi Friday at the yearly Jackson Hole event. The 10-year yield has been trading lower since hitting a high of 2.40% in early July.
In a CNBC article Wells Fargo raised it’s year end SP500 forecast to 2400 from 2300 citing good second quarter corporate results and strong overseas growth. The forecast still suggests the index will end lower by the end of the year. The updated target range puts Wells Fargo just below the average forecast of Wall Street strategists. The average end of year target stands at around 2,430.
The S&P 500 (SPX) fell sharply lower at the end of Wednesday’s trading session, pushing below 2450 and towards the end of year target mentioned above. The moves added to what has been a volatile month for stocks when compared with the recent lethargy which has enveloped the market year to date.
Technical Standpoint
From a technical standpoint the current trend is down if looking at the daily swing chart. However, momentum has turned to the upside. A push up through 2454.75 will signal upward momentum is increasing. A push up through 2474.00 will likely see further upside. On the other hand more downside is likely if the index breaks under 2415.75.
The current range is 2415.75 to 2488.50. SPX’s retracement area is 2452.25 to 2460.75 with the area currently being tested. The medium term range is between 2474.00 and 2415.75 with the retracement at between 2444.75 and 2452.25.
A short-term range looks to be forming between 2415.75 and 2454.75 and if the selling pressure intensifies then its retracement area will likely be 2435.25 to 2430.50 will become the primary downside target.
Technical Outlook
Short Term Technical Outlook:
S&P 500 (INDEXSP:.INX)has fallen back towards the floor of a rising trend channel. A continuation of this rise can be expected and the current price level perhaps being a good entry price. The index has support at points 2427 and resistance at points 2480. The index is assessed as technically positive for the short term.
Medium Term Technical Outlook:
S&P 500 is within a rising trend, which indicates continued upward momentum. The index has support at points 2400. The index is assessed as technically positive for the medium long term.
Long Term Technical Outlook:
S&P 500 is within a rising trend, which indicates continued upward momentum. S&P 500 (INDEXSP:.INX) has risen strongly since the positive signal from a rectangle formation at the break through the resistance at 2084. The objective at 2362 is now met, but the formation still gives a signal in the same direction. The index has broken up through the resistance at points 2400. This suggests further price rises. The index is overall assessed as technically positive for the longer term.
Summary
A continuation of trading over 2452.25 will signal the presence of buyers and will likely create enough upward momentum to challenge a main Fibonacci level at 2460.75. A continued move under 2474 will likely pressure the market further.
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