S&P 500 pulls back from record high

The US equity markets have pushed out to record highs recently. A slight pullback could provide an entry for anyone looking to go long on the main US index.

The US stock markets have pulled back recently from the record highs as the Fed remained committed to increasing interest by the middle of the year. In recent weeks we have seen a reduction in inflation rates which gave the stock bulls hope the Fed would old off raising interest rates.

There are other reasons for the record highs and this is no more evident than in the Labour markets. US Nonfarm payrolls have consistently been returning 200k+ results and the Unemployment claims figures are averaging under the 300k mark. Manufacturing PMI’s and various other indicators are showing the relative strength in the US economy, which has helped to push stocks higher.

The pullback may provide an entry position for traders looking to long the S&P 500. Looking at the chart the 2061.32 level of support is one that stands out and is likely to act as rather solid support if the pullback continues. If it holds, this would be a good level to long from. Support on the way there will be found at 2082.09. If the Fed becomes more hawkish over the next month or so look for support further down at 2024.39.

The longer term outlook for US equities is still bullish given the strong economic data coming out at the moment. Watch out for Non-farm Payrolls at the end of this week as they can do funny things to these markets.