Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Time to take the RED Pill - 28th May 24
US Economy Slowing Slipping into Recession, But Not There Yet - 28th May 24
Gold vs. Silver – Very Important Medium-term Signal - 28th May 24
Is Gold Price Heading to $2,275 - 2,280? - 28th May 24
Stocks Bull Market Smoking Gun - 25th May 24
Congress Moves against Totalitarian Central Bank Digital Currency Schemes - 25th May 24
Government Tinkering With Prices Is Like Hiding All of the Street Signs - 25th May 24
Gold Mid Tier Mining Stocks Fundamentals - 25th May 24
Why US Interest Rates are a Nothing Burger - 24th May 24
Big Banks Are Pressuring The Fed To Losen Protection For Depositors - 24th May 24
Another Bank Failure: How to Tell if Your Bank is At Risk - 24th May 24
AI Stocks Portfolio and Tesla - 23rd May 24
All That Glitters Isn't Gold: Silver Has Outperformed Gold During This Gold Bull Run - 23rd May 24
Gold and Silver Expose Stock Market’s Phony Gains - 23rd May 24
S&P 500 Cyclical Relative Performance: Stocks Nearing Fully Valued - 23rd May 24
Nvidia NVDA Stock Earnings Rumble After Hours - 22nd May 24
Stock Market Trend Forecasts for 2024 and 2025 - 21st May 24
Silver Price Forecast: Trumpeting the Jubilee | Sovereign Debt Defaults - 21st May 24
Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! - 19th May 24
Important Economic And Geopolitical Questions And Their Answers! - 19th May 24
Pakistan UN Ambassador Grows Some Balls Accuses Israel of Being Like Nazi Germany - 19th May 24
Could We See $27,000 Gold? - 19th May 24
Gold Mining Stocks Fundamentals - 19th May 24
The Gold and Silver Ship Will Set Sail! - 19th May 24
Micro Strategy Bubble Mania - 10th May 24
Biden's Bureau of Labor Statistics is Cooking Jobs Reports - 10th May 24
Bitcoin Price Swings Analysis - 9th May 24
Could Chinese Gold Be the Straw That Breaks the Dollar's Back? - 9th May 24
The Federal Reserve Is Broke! - 9th May 24
The Elliott Wave Crash Course - 9th May 24
Psychologically Prepared for Bitcoin Bull Market Bubble MANIA Rug Pull Corrections 2024 - 8th May 24
Why You Should Pay Attention to This Time-Tested Stock Market Indicator Now - 8th May 24
Copper: The India Factor - 8th May 24
Gold 2008 and 2022 All Over Again? Stocks, USDX - 8th May 24
Holocaust Survivor States Israel is Like Nazi Germany, The Fourth Reich - 8th May 24
Fourth Reich Invades Rafah Concentration Camp To Kill Palestinian Children - 8th May 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Blue Chips Take the Lead, Enough to Push Stock Market Higher?

Stock-Markets / Stock Markets 2018 Jun 07, 2018 - 12:53 PM GMT

By: Paul_Rejczak

Stock-Markets

Investors' sentiment continued to improve on Wednesday, as the broad stock market accelerated its short-term uptrend following Monday's breakout above three-week-long consolidation. The S&P 500 index gets closer to march local high. Will the uptrend continue? There are still two possible medium-term scenarios, but bulls are much happier now.

The U.S. stock market indexes gained between 0.7% and 1.4% on Wednesday, extending their short-term uptrend, as investors' sentiment continued to improve and blue-chip stocks regained their strength. The S&P 500 index broke above 2,750 mark and it currently trades just 3.5% below January's 26th record high of 2,872.87. The Dow Jones Industrial Average gained 1.4%, as it was relatively stronger than the broad stock market yesterday, and the technology Nasdaq Composite gained 0.7%.


The nearest important level of resistance of the S&P 500 index is now at around 2,780-2,800, marked by mid-March local high. The next resistance level is at 2,830-2,840, marked by the late January short-term consolidation. On the other hand, support level is at 2,750, marked by recent level of resistance. The support level is also at 2,735-2,740, marked by Monday's daily gap-up of 2,736.93-2,740.54.

The broad stock market accelerated its short-term uptrend yesterday, as the S&P 500 index broke above resistance level of 2,750. Will it continue higher despite short-term overbought conditions? We may see some uncertainty and profit taking action today. There are still two possible medium-term scenarios - bearish that will lead us below February low following trend line breakdown, and the bullish one in a form of medium-term double top pattern or breakout towards 3,000 mark. There is also a chance that the market will just go sideways for some time, and that would be positive for bulls in the long run (some kind of an extended flat correction):

Mixed Expectations, Correction or Just Pause?

The index futures contract trade between 0.0% and +0.2% vs. their yesterday's closing prices, so expectations before the opening of today's trading session are virtually flat to slightly positive. The main European stock market indexes have been mixed so far. Investors will wait for the Initial Claims number release at 8:30 a.m. The broad stock market will likely fluctuate following yesterday's advance. Will we see a downward correction at some point? The index may retrace some of its yesterday's breakout above resistance level of 2,750, but there have been no confirmed negative signals so far.

The S&P 500 futures contract trades within an intraday consolidation, as it retraces some of its overnight advance. The market bounced off resistance level at around 2,780. Potential level of resistance is also at 2,800. On the other hand, support level is at 2,770, and the next level of support is at 2,750-2,760. The futures contract continues to trade above its week-long upward trend line, as the 15-minute chart shows:

Nasdaq at New Record High

The technology Nasdaq 100 futures contract follows a similar path, as it retraces some of its overnight advance. Tech stocks gauge reached new record high, as it slightly exceeded its mid-March top. The Nasdaq 100 gained over 300 points from last Wednesday's local low. Potential level of resistance is at around 7,230, marked by new record high. On the other hand, support level is now at 7,100-7,150, among others. The Nasdaq futures contract remains above the level of 7,200, as we can see on the 15-minute chart:

Apple, Amazon at Record Highs, but Correction May Come Soon

Let's take a look at Apple, Inc. stock (AAPL) daily chart (chart courtesy of http://stockcharts.com). It reached another new record high on Wednesday, as it continued its short-term uptrend following Monday's breakout above $190. There is still a potential resistance level of around $200. Investors' sentiment is bullish, but will uptrend continue? There have been no confirmed short-term negative signals so far:

Now let's take a look at Amazon.com, Inc. stock (AMZN) daily chart. It accelerated its uptrend on Tuesday, as price got closer to $1,700. Yesterday, it reached new record high above that level, but it closed slightly negative. We were recently saying that Amazon's price action looked pretty bullish. And the stock did break higher! Now we can see some negative technical divergences, along with short-term overbought conditions. However, there have been no confirmed negative signals so far:

Dow Jones Breaks Higher

The Dow Jones Industrial Average broke above its medium-term downward trend line in the first half of May. Then it continued higher above a few-week-long downward trend line. However, it kept bouncing off resistance level of 25,000. In the second half of May blue-chip stocks were relatively weaker than the broad stock market, as Dow Jones fell below 24,500 again. Yesterday, we wrote that "the market is taking an attempt at breaking higher". And it did break up above 25,000 mark. We could see some more upward action here:

The S&P 500 index continued its short-term uptrend yesterday, as it broke above the resistance level of 2,750. Expectations before the opening of today's trading session are virtually flat and we may see profit taking action at some point. But there have been no confirmed negative signals so far.

Concluding, the S&P 500 index will likely open virtually flat today. The market may fluctuate after Wednesday's rally. Will the uptrend reverse? Probably not. However, we may some downward correction. Tech stocks may be relatively weaker on Thursday, as investors rotate into blue-chip stocks.

If you enjoyed the above analysis and would like to receive free follow-ups, we encourage you to sign up for our daily newsletter – it’s free and if you don’t like it, you can unsubscribe with just 2 clicks. If you sign up today, you’ll also get 7 days of free access to our premium daily Gold & Silver Trading Alerts. Sign up now.

Thank you.

Paul Rejczak
Stock Trading Strategist
Stock Trading Alerts
SunshineProfits.com

Stock market strategist, who has been known for quality of his technical and fundamental analysis since the late nineties. He is interested in forecasting market behavior based on both traditional and innovative methods of technical analysis. Paul has made his name by developing mechanical trading systems. Paul is the author of Sunshine Profits’ premium service for stock traders: Stock Trading Alerts.

* * * * *

Disclaimer

All essays, research and information found above represent analyses and opinions of Paul Rejczak and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Paul Rejczak and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Rejczak is not a Registered Securities Advisor. By reading Paul Rejczak’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Paul Rejczak Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in