US stocks open higher, closer to record levels

Major US equity indices kicked-off a fresh trading week on a slightly positive note, with all major indices inching closer to record high levels. In a holiday-shortened trading week, investors might prefer to stay on the sidelines, amid thin traditionally thin market liquidity conditions, and leave markets indecisive of a firm direction.

At the time of writing, the Dow Jones Industrial Average rose over 50-point to 18,920, while the broader S&P 500 index moved above its all-time closing high level to 2,191, up nearly 10-points from previous week's closing level. Meanwhile, tech-heavy Nasdaq composite jumped 30-points and touched new intraday record high level. 

Following a surprise win for Donald Trump in the US presidential election, major US indices have recorded gains of anywhere between 2-3% and now await for fresh developments / news pertaining to aggressive fiscal stimulus measures from Trump administration.

In other markets, WTI crude oil prices rose on hopes of a possible production freeze agreement this month. Meanwhile, the overall US Dollar Index witnessed a corrective slide after briefly jumping to the highest level since March 2003 on increasing bets of an eventual Fed rate-hike action. The CME group's FedWatch Tool is pricing-in over 95% probability of such an action at the central bank's meeting in December.

Technical outlook

Noting the bullish set-up, Carol Harmer, Founder at charmertradingacademy.com, notes, "to be sure of a break we really do need to take out the 2195 area and stay above it...That would clear out the stops and buyers would feel more comfortable coming back in the market looking for a move first to 2204 and then onto 2225....Obviously if we do break 2193 then the market has no top really as we are in uncharted territory.....but we go by fib extensions and daily and weekly pivot points and this should drive us in the right direction....The question is what level should we break on the downside to negate another bull run in the S&P....It really is the 2160/55 area that needs to break to take off upward pressure....If we can do this there is scope for further declines back towards the 2134/2119 support....The market is still strong even at those lower levels...and I believe a move back to here would ease the overbought conditions on the charts and encourage buyers back in ..."

To learn more about this topic, check our video analysis