Excitement Builds As SP500 Near All Time Highs – How To Profit From It?
U.S stocks took off on Thursday, with the Nasdaq setting a new record, while other benchmarks including the S&P500 are also likely to reach all-time highs. Global equity markets continued to be fueled by the Fed’s decision to defer an interest rate hike at the current meeting.
With the September meeting over and done with, focus will shift to the November and December meetings. Markets assume that the U.S will not make a move until the end of the year, as the next meeting is due just days before the presidential election and it does not include a press conference. The prospects of an interest rate increase are quite uncertain considering comments from Fed Chair Janet Yellen and the division between Fed officials in maintaining accommodative policy, has caused a weakening of the dollar subsequent to the press conference by the Fed chair .
Thanks to a softer greenback, combined with a surprise drop in U.S. crude inventories, oil surged on Thursday, joining the post-Fed “celebration” with other industrial commodities. Adding to the upward momentum in the crude price were positive comments from OPEC governor Falah Alamri and rumors that Iran and Saudi Arabia were meeting this week to discuss the output freeze deal. Rising oil prices helped boost the energy sector by 0.48% so far on the day.
The technology index contributed to the benchmark S&P 500 index’s gains with shares of Amazon.com touching a record after its price target was raised to $900. Apple’s share price target also received an upgrade, rising 0.9 percent to $114.59.
However, it was the Real Estate sector that dominated the benchmark. Being the youngest member making up the index of 500 of the biggest companies listed on the US markets, the sector is benefitting from a low interest rate environment that has encouraged both investors and people looking for personal homes to borrow and invest into the housing market.
Fig: SP500 D1 technical Chart
The SP500 has been on a surge that may take the index to the record high at 2192.67. The short-term DMA20 refused to cross over the DMA50 which continues to be placed above the DMA20, suggesting a strong bullish force in the market. The ADX index is witnessing a wide gap between the +DI and –DI line, while the ADX line has rallied to a level of 28.63. The Stochastic index is also helping consolidate the uptrend with no signs of any pullback signaled yet.
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