The markets rose on Friday following more trade deal optimism as the Dow Jones Industrial Average gained over 300 points. The Dow and Nasdaq Composite are both poised to rise for an eighth straight week while the S&P 500 is looking to make it seven weekly gains in the past eight.
“I am a bit surprised the market has been able to maintain this upward trajectory at the level that it has,” said Daniel Deming, managing director at KKM Financial. “We had a little hiccup last week, but that was quickly priced out of the market. That tells me there is still money trying to seek a higher return, or at least take on more risk.”
In a press conference at the White House, U.S. President Donald Trump said he will be meeting with Chinese President Xi Jingping in Washington next week. The meeting comes as a U.S. trade delegation led by Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer were in in Beijing this week.
This week, investors have been feeding off news that President Trump is open to extending the 90-day trade truce that is set to expire on March 2. The softened stance by President Trump hasn’t surpirsed investors, but rather confirmed their notions.
“If there is a resolution, you’ve got a lot of market participants who are anticipating a big pop-up. That’s why we continue to see money into the equity market as well,” KKM Financial’s Deming said.
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In the meantime, more bullishness could be looming for stocks as the S&P 500 crossed a key technical indicator recently, moving past its 200-day moving average–something not seen since December 3. The S&P 500 was down 6.2 percent to end 2018, but it has since recovered after U.S. equities were roiled by volatility to close the year.
To some technical analysts, breaking through that 200-day moving average paves the way for bigger gains ahead. In December alone, the S&P 500 was down 9 percent, making it the worst December for the index since 1931.
An early sign of bullishness came last week after the S&P 500 broke past the 2,700 level and currently sits at 2,768 as of 11:10 a.m. ET. Other technical analysts are seeing positive signs of more upside to come despite any pullbacks that may come.
“You could get a pull back to 2,550 to 2,600, and that may be all you need,” said Strategas Research technical analyst Todd Sohn. “I do like what I’m seeing. It’s important to remember the S&P is up 17 percent over 32 trading days. It’s a really good run, and I don’t want to stand in front of it, but at some point, it’s going to need to pause for more than two or three days.”
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