Wall Street Close: Risk sentiment turns positive again as all three major bourses close higher

• The S&P 500 closes 0.63% higher moving 19.48 points higher.
• The Dow index is 0.59% in the black and the Nasdaq outperforms to rise 1.11%.

It has been an interesting session as the equities markets reject coronavirus fears to focus on the positives with the bulls remaining in charge. In Germany, the “r rate” has moved above 1% but this is considered a statistical anomaly as the infection rate was soo low for a long time. Elsewhere in the US, some of the states are still struggling as Florida reported 2,926 new cases on Monday. This now takes the toll of new infections above 100,000. On the plus side, the US administration stated that the next round of fiscal stimulus could involve more cheques to the public. Stocks ticked up on the news and this just added to the bullish sentiment. 

On Monday the VIX has fallen over 7%. This usually happens when the stock markets rally and the risk appetite in the market is positive. The price is currently trading above the 55 Exponential Moving Average and 200 Simple Moving Average. The moving averages are a good gauge in the VIX as when the price is underneath it usually represents a bull market. In this case, the VIX has used the 200 Simple Moving Average as a support zone and bounced back to the upside. In the future, this support could be broken.

The outperforming sector in the S&P 500 was retail as GAP, Footlocker and Best Buy all rose over 4%. This is probably due to opening up of economies but GAP was also upgraded by Well’s Fargo. 

Once again the underperforming sector was travel. American Airlines, Norwegian Cruise Lines and Royal Caribbean Cruises all fell over 6% as the travel sector in the US looks to be in deep trouble. NY Governor Cuomo stated that visitors from the worst affected areas may need to self-quarantine when reaching the state. 

S&P 500 daily chart

The daily candle has moved higher in the session but if the uptrend is to resume there is a key level at 3233.25. The market has been making higher highs and higher lows and it looked like last week was the start of the next wave lower. Obviously this scenario has now been moved upside down and the potential of the uptrend being intact is increasing. 

There is also the red trendline in the way of the move higher and it could meet the price at around 3200.00. On the plus side for the bulls on the downside there is lots of traffic. The 200 Simple Moving Average and 55 Exponential Moving Average have been providing some support and beyond that 2936.50 has also proved to be sticky. 

Additional levels