US equity indices advanced every day last week, rising for a fifth week for their longest rally in 14 months.

Sentiment remained bullish on Monday, boosted by the latest news that Regeneron Pharmaceuticals announced a Phase 3 trial of its injectable monoclonal antibody cocktail, REGEN-COV, which effectively prevented people from becoming sick from COVID-19.

The company said REGEN-COV reduced the risk of illness by 81.6% over a two to eight month period for those who received the four subcutaneous injections. In addition, it reported zero hospitalizations in that period. 

Additionally, Pfizer reported similar results with its anti-COVID pill, sending the company’s shares sharply higher. 

On Friday, traders paid attention to the US labor market update. October nonfarm payrolls increased by 531,000 jobs, and data for September was revised higher to show 312,000 jobs created instead of the previously reported 194,000. Nevertheless, both the US dollar and US yields fell after the release of the report. Traders bought stocks after the data, sending the major bourses to new record highs.

More Room To Go?

Moreover, the Goldman Sachs flow trader Scott Rubner, who said in mid-October that the meltup is just starting, has a stunning update for what could happen next. And it appears that at this point, going simply on technicals and flows, a 5,000 target on the SP500 is not unreasonable.

In the last two weeks, options trading in the USA has never been greater. 

“After following the retail trading community for 18 years, I could never imagine typing these large numbers” Rubner said.

However, indices now look overbought on many time frames, implying a correction is due soon. 

Nevertheless, the seasonal Christmas period is nearing, usually leading to solid gains in the stock market. Therefore, the SP500 index could still achieve the 5,000 USD psychological level by the end of the year. 

Technically speaking, it is now challenging to find any resistance since stock indices have never been here. Therefore, traders might watch for any unusual price formations indicating a possible price reversal.

On the downside, the key medium-term support is at September highs; for the SP500 index, it is at around 4,550 USD. As long as the index trades above it, the outlook still appears bullish.