The S&P 500 is set to open higher after the jobs data, but is the market becoming overbought?
The S&P 500 Index closed 0.47% higher on Wednesday, reaching another record high of 6,227.60. Investor sentiment remained elevated ahead of the long holiday weekend, supported by expectations of positive tariff-related developments and upcoming economic data.
This morning, the S&P 500 is poised to open 0.3% higher, as indicated by futures contracts. The Nonfarm Payrolls report came in stronger than expected at +147,000 (vs. +111,000 forecast).
Investor sentiment has improved significantly, as reflected in Wednesday’s AAII Investor Sentiment Survey, which reported that 45.0% of individual investors are bullish, while 33.1% are bearish.
The S&P 500 continues its uptrend, as the daily chart indicates.
S&P 500 Futures Contract: Higher Following Jobs Data
This morning, the S&P 500 futures contract reached a new record high of 6,295, in reaction to the jobs data.
Resistance is now at 6,300, while support is around 6,270, marked by recent local highs.
Markets remain highly sensitive to geopolitical developments and could stay volatile in the near term.
Conclusion
Stock prices are likely to open slightly higher today, as investors react to the stronger-than-expected jobs report. The S&P 500 index is set to open at a new all-time high; however, some profit-taking could occur in the near term.
On Tuesday, I noted “I think that in the short term, overbought technical conditions may lead to a period of consolidation or a mild pullback. However, no clear bearish signals are currently evident”. That outlook remains valid.
Here’s the breakdown:
- The S&P 500 remains near new record highs.
- The rally extended gains for those who bought based on my Volatility Breakout System.
- There are no clear bearish signals yet, but a deeper downward correction is not out of the question at some point.
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Thank you.
Paul Rejczak
Stock Trading Strategist
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