Summary:
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US500 moves up into uncharted territory
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Price surges after breaking prior resistance around 2918
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US100 and US30 remain shy of record peaks
The push higher in US indices which began overnight on Monday has continued today, with the US500 moving above its previous peak to make a new all time high ahead of the Wall Street open. The market has surged higher in the past couple of hours after breaching prior resistance around 2918 and the market is now looking to move on up higher and extend its gains after a period of consolidation. In fact the low of the week around 2883 came shortly after the tariffs from the US on Chinese imports were announced and it appears that it was a good example of selling the rumour and buying the fact!
The US500 has rallied above its previous peak around 2918 in recent hours and pushed up to make a new record high ahead of its cash open. Source: xStation
What’s quite unusual about the move into uncharted territory is not just that it occurred before the US session has begun but more that it hasn’t been replicated in the other US large cap indices (US100 and US30) or even the small caps (US2000). Given that all the stocks on the US100 and US30 are in the US500 they normally exhibit a close correlation and it is rare to find the US500 making new highs when the neither of the other two are. The US30 appears best placed to make the move into record territory with price currently trading less than 1% or around 100 points from it’s all-time high.
The US30 is on track for a 3rd day of strong gains and the market is now within striking distance of its all-time high of 26683 made earlier this year. Source: xStation
The US100 has actually been the laggard of the group and is only roughly back to where it traded at the start of the week. To be fair the market is less than 2% from its peak of 7696 but as of yet it isn’t showing the same kind of upwards thrust as the US500 or US30. The market remains close to its 8 and 21 EMAs and it wouldn’t take much downside to see a negative cross. The question here is whether the US100 is just acting as a laggard for the time being and that it will catch up, or whether the failure to rally as much as its peers of late reveals some kind of underlying softness which could be seen to threaten the large tech rally seen so far this year. 7400 remains an area of interest for possible support while 7626 and 7696 are levels to keep an eye on to the upside.
The US100 is lagging behind the US500 and US30 so far this week. Is price set to catch up or does the recent underperformance reveal an underlying softness in the market? Source: xStation
