Risk tone recovers during early Monday’s inactive Asian session, favoring the US Treasury yields and stock futures to consolidate Friday’s losses.

That said, S&P 500 Futures print 0.45% intraday gains and the US 10-year Treasury yields gain 4.2 basis points (bps) to 1.378% by the press time. It’s worth noting that the Wall Street benchmarks closed negative while the US 10-year Treasury yields dropped around 10 basis points (bps) to 1.35%, the lowest since late September, the previous day.

Hopes of finding a cure to the South African covid variant, dubbed as Omicron, joins chatters that the same is less dangerous than initially feared also favored the market sentiment. After initially hitting Europe and the UK, the virus strain tightens its grip towards reaching the key global nations like the US and China. Though, global scientists are optimistic about finding the cure for the COVID-19 strain. Recently, US top Medical Officer Anthony Fauci backed Pfizer’s drug to be effective against Omicron while the news of chewing gum to stop the virus spread and the UK’s push for treatment also keeps traders hopeful.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

Overall, it lost 5.04% from the Nov. 22 record high of 4,743.83. But Thursday’s trading session was bullish and stocks were gaining. Was it an upward reversal? This morning stocks are expected to open 0.3% higher after the mixed monthly jobs data release. For now, it looks like a correction within a downtrend. We may see a short-term consolidation following the recent declines.

The nearest important support level is now at 4,500. On the other hand, the resistance level is at 4,580-4,600, marked by the recent local lows. The S&P 500 remains below its short-term downward trend line, as we can see on the daily chart.

SP500 Targets 61.8% Fib at 4451

Dec 06 2021

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