S&P 500 hits record high at 2582 on 27th Oct 2017 and shown a minor dip. The index is currently trading around 2575.
The index is rallying continuously from the low of 1810 made on Feb 2016 without any major correction. Main driver for this rally was Quantitative easing program by Fed and ECB. The index has gained almost 280.6% for the past 9 years. Liquidity is the main factor which has taken the index to record high.
Now currently both Fed and ECB is planning to taper the QT and QE respectively. ECB has planned to taper bond buying form 60 billion euros to 30 billion euros that will reduce the QE form 720 billion euros to 270 billion euros. The valuations of S&P 500 looks expensive at the current level of 28.7x earnings which almost double than average trailing PE of 14.
Technically, 21- day MA at 2558 was acting as major support and convincing close below will drag the pair till 2543 (Oct 25th low)/ 2500/2400. Minor weakness can be seen below 2400 level.
On the higher side, major resistance is around 2605 (161.8% retracement of 2582 and 2543) and any7 violation above will take the index till 2625/2650.
Overall trend is bullish but small correction cannot be ruled out.
It is good to sell on rallies around 2590-2595 with SL around 2625 for the TP of 2545/2500.
The index is rallying continuously from the low of 1810 made on Feb 2016 without any major correction. Main driver for this rally was Quantitative easing program by Fed and ECB. The index has gained almost 280.6% for the past 9 years. Liquidity is the main factor which has taken the index to record high.
Now currently both Fed and ECB is planning to taper the QT and QE respectively. ECB has planned to taper bond buying form 60 billion euros to 30 billion euros that will reduce the QE form 720 billion euros to 270 billion euros. The valuations of S&P 500 looks expensive at the current level of 28.7x earnings which almost double than average trailing PE of 14.
Technically, 21- day MA at 2558 was acting as major support and convincing close below will drag the pair till 2543 (Oct 25th low)/ 2500/2400. Minor weakness can be seen below 2400 level.
On the higher side, major resistance is around 2605 (161.8% retracement of 2582 and 2543) and any7 violation above will take the index till 2625/2650.
Overall trend is bullish but small correction cannot be ruled out.
It is good to sell on rallies around 2590-2595 with SL around 2625 for the TP of 2545/2500.
