Equity markets have rallied strongly in recent days and the run of wins has built into one of the best January’s we’ve seen for many years.
The S&P 500 rose 7.9% making it the best January performance since 1989. The Dow was only marginally lower.
Markets have really bounced since the pre-Christmas sell-off. That was a period where interest rate hikes in the US were really starting to worry investors and concerns around trade still weighed heavily.
Yesterday’s US President Trump tweeted about the positive progress being made on the trade front. While earlier this week, the FOMC significantly changed its outlook on rate hikes going forward.
All these factors have seen the bulls wrestle back control.
So far today the ES is flat and slowly grinding higher in Asian trade.
The SPX is holding above the 2700 level and to me, there is very little standing in its way to a move to 2800.
2800 will make for a far greater challenge as we’ve seen price top out there a number of times. It is also only around 3.5% from where we currently sit.
Of course, the big data point this week is yet to come, in the form on US employment, so that will likely set the agenda for Friday’s price action.