S&P 500 Index Approaches Resistance Forward of 3Q US Earnings Season

S&P 500 Index Approaches Resistance Forward of 3Q US Earnings Season

S&P 500 Index, US Q3 Company Earnings, Covid-19 Vaccine, Johnson & Johnson – Speaking Factors:The haven-associated US Dol

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S&P 500 Index, US Q3 Company Earnings, Covid-19 Vaccine, Johnson & Johnson – Speaking Factors:

  • The haven-associated US Dollar and Japanese Yen clawed again misplaced floor in the course of the Asian buying and selling session.
  • The short-term cessation of Johnson & Johnson’s Covid-19 vaccine trials might foster a interval of threat aversion.
  • S&P 500 index is vulnerable to sliding decrease because the RSI swerves away from overbought territory.

Asia-Pacific Recap

Fairness markets broadly gained throughout Asia-Pacific commerce, with Australia’s ASX 200 index climbing 1.04% and Japan’s Nikkei 225 index nudging 0.18% increased.

A setback in coronavirus vaccine trials appeared to weigh on market sentiment, because the haven-associated US Greenback and Japanese Yen clawed again misplaced floor in opposition to their main counterparts.

Gold dipped again under the $1920/ozmark and silver slipped as a lot as 2%, regardless of yields on US 10-year Treasuries shifting 1 foundation level decrease.

Wanting forward, the Euro-area’s ZEW Financial Sentiment Index launch for the month of October headlines the financial docket alongside US inflation information for September.

S&P 500 Index Approaches Resistance Ahead of 3Q US Earnings Season

DailyFX Financial Calendar

Halted Covid-19 Vaccine Trials to Weigh on US Equities

Higher-than-expected third-quarter US company earnings might restrict the draw back for the benchmark S&P 500 index, as fading fiscal aid hopes and a pause in one of many extra promising Covid-19 vaccine trials begins to gnaw at traders’ sentiment.

Johnson & Johnson (J&J) introduced that it had paused all medical trials of its coronavirus vaccine as a result of discovery of a research topic with an unexplained sickness.

After all, this short-term cessation has been described as an “anticipated a part of any medical research, particularly giant research” by J&J in a press release launched on October 12, with the New Jersey primarily based medical machine firm including that “as many trials are placebo-controlled, it’s not at all times instantly obvious whether or not a participant acquired a research remedy or placebo”.

Nevertheless, with this being the second time a Covid-19 vaccine trial has been paused in latest months – Astrazeneca briefly halted its vaccine trials in September – a delayed restart might considerably weigh on the efficiency of risk-associated property within the near-term.

That being mentioned, third-quarter earnings from main monetary companies JPMorgan, Citigroup and BlackRock might counterbalance the disappointing developments within the battle in opposition to Covid-19, as traders proceed to focus intently on the battle between incumbent President Donald Trump and Democratic nominee Joe Biden forward of the US presidential election on November 3.

S&P 500 Index Futures Every day Chart – RSI Hints at Fading Momentum

S&P 500 Index Approaches Resistance Ahead of 3Q US Earnings Season

S&P 500 index futures every day chart created utilizing TradingView

From a technical perspective, the US benchmark S&P 500 index might be vulnerable to reversing decrease within the near-term, as worth fails to breach psychological resistance on the 3550 mark.

With the RSI swerving away from overbought territory and quantity notably fading all through the S&P 500’s rebound from the September low (3198), the trail of least resistance appears skewed to the draw back.

That being mentioned, the event of the 21-day shifting common hints at constructing bullish momentum, because it seems to be eyeing a cross above its ‘slower’ 50-period counterpart.

Nonetheless, a short-term correction seems within the offing, with a every day shut again under 3500 most likely precipitating a interval of extra aggressive promoting and producing a pullback to key assist on the February excessive (3397.50).

S&P 500 4-Hour Chart – Inverse Head and Shoulders Sample Taking part in Out?

S&P 500 Index Approaches Resistance Ahead of 3Q US Earnings Season

S&P 500 index futures 4-hour chart created utilizing TradingView

Zooming right into a 4-hour chart, nevertheless, depicts a extra bullish situation than that seen on the every day timeframe, because the 50-DMA jumps again above its sentiment-defining 200-period counterpart and the RSI continues to trace firmly inside overbought territory.

With worth slicing simply by means of the neckline of the Inverse Head and Shoulders reversal sample carved out from early September, a push to contemporary document highs seems on the desk.

The bullish reversal sample’s implied measured transfer (3629.5) means that worth might rise an extra 3.3% from present ranges and push above the psychologically imposing 3600 mark.

Nonetheless, with the RSI sliding again from its highest intraday readings since early September and resistance on the 88.6% Fibonacci (3542.75) stifling bullish potential, a near-term pullback seems possible.

A break under 3500 would most likely generate a retest of former resistance-turned-support on the Inverse H&S neckline (3424), if sellers efficiently overcome assist on the 23.6%…