S&P 500 Price Analysis: The S&P 500 accelerates past a long standing trendline

S&P 500 weekly chart

The S&P 500 has managed to hit yet another record high despite COVID-19 hanging over the economy like a dark cloud. The record amount of stimulus being pumped into the markets seem to be doing the trick as the US indices rocket higher. Another factor has been the weak US dollar helping investors from abroad to buy stocks that would usually be more expensive. In the UK this can be noted by the widening divergence between the FTSE 100 and the S&P 500. 

Today the rally has been led by DXC Technology (NYSE:DXC) who have risen by an impressive 10.68%. The firm announced that Topsail RE has selected DXC Technology to deploy an end-to-end solution supporting the complete reinsurance life cycle. Shares in drinks company Brown Foreman also rose over 10% after their latest earnings results showed net income for the quarter to July 31 rose to USD 324 million, or 67 cents a share, vs USD 186 million, or 39 cents a share, in the previous year.

Looking at the weekly S&P 500 chart the price has accelerated out of a trendline that has spanned 8 years to the upside. The trendline runs over the top of the peaks of the uptrend that has been in place since the last financial crises that happened in 2008-9. 

It is hard for a technical analyst to project moves to the upside unless using Point and Figure of Fibonacci extensions or projections. The best bet is to ride with the trend until there are signs of a reversal and there are none of these just yet. The 127.2% extension would take the price to 3720.37 and the golden ratio of 161.8% projects the price to hit 4136.15.

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