Stock indices are ready to renew a historical high

Stock indices are ready to update a historical high and the reasons for this are the following …

Trade relations between the United States and China have moved from the mutual introduction of new duties to mutual concessions in the form of deferrals and negotiations, which reduce tension between countries. So, starting in September, the market has maintained a steady increase in optimism, due to a decrease in the US – China trade tension and in the world in general.

Due to the reduction of risks, risky assets received support, which remained under the pressure due to pessimism and fears of the aggravation of the trade war. First of all, stock markets received a support, which caused an increase in the value of stocks, raw materials and commodity currencies.

What’s waiting for the stock indices

Stock indices are the main catalyst, which reflect the dynamics of the stock market. So world stock indices retreated from historical highs, after moving in flat during August, limiting themselves to risks and the expectation of new mutual duties. They formed a certain zone of uncertainty, which relieved oversold after the decline in world stock indices in late July – early August. This served as an opportunity to form a reversal, giving time for the growth to accumulate.

As a result, many of the US stock indices returned to historical highs. For example, major US indices are limited to July highs and continue to grow.

DOW 30

The Dow Jones 30 index is limited to 27400.0. Breaking through this level with high probability will open the way to the levels: 28100.0 and 28800.0. Significant support continues to be on the marks: 26000.0 and 25200.0.

S&P 500

The S&P 500 is limited to a high of 3030.0. Its breaking with high probability will open the way to the levels: 3130.0 and 3220.0. Significant support are the marks: 2860.0 and 2750.0.

Nasdaq

The Nasdaq index is limited to a high of 8020.00, breaking through which will open the way to the levels: 8170.00 and 8430.00. Support are the marks: 7510.00 and 7220.00.

The main factor in the growth of stock indices and risk factors are the US – China trade relations. Better relationships will support stock indices and reduce the likelihood of a global recession.

The slowdown in the improvement of trade relations between the United States and China will cause the formation of lateral dynamics. In the face of recession risks, this could put pressure on the US stock indices. Even with the relative absence of tension in trade relations.

Anton Hanzenko