Last week the US President Trump stated on Twitter that he will “unveil his major tax reform plan on Wednesday, April 26.”
The recent reported US Q1 corporate earnings have been outperformed, pushing US stocks up. Tuesday evening, the Dow Jones index hit a 6-week high of 21022, and the S & P 500 index hit an 8-week high of 2392.15. The S & P 500 index has rallied around 1.7% over the past two days.
The value of US stock markets has reached the highest level since 2004, some investors worry US stocks are overvalued.
The current trend of the S & P 500 index remains bullish, trading above the 10-day and the 20-day SMAs.
The price is currently nearing the short-term major resistance level at 2400, where there is heavier pressure, we will likely see a consolidation in this area prior to the next move.
The 4-hourly Stochastic Oscillator reading is around 80, suggesting a correction.
The resistance level is at 2390, followed by 2400 and 2410.
The support line is at 2380, followed by 2370 and 2360.
A further 190 S&P 500 listed companies will report earnings this week including some major components such as: Microsoft, Amazon, Intel, and Alphabet. The mega-caps Apple and Facebook will report earnings next week.
Whether the bulls will break the major resistance depends on the performance of the upcoming corporate earnings, Trump’s tax reform speech, and whether Trump’s tax reform bill could be passed.
Keep a close eye on Trump’s announcement, scheduled this afternoon, it will likely cause volatility for USD and US stock markets.
If the resistance level at 2400 is broken, we will likely see the bulls further test the resistance level at 2450.