Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
Iran's Death Spiral -- 40 Years And Counting - 17 Feb 19
Venezuela's Opposition Is Playing With Fire - 17 Feb 19
Fed Chairman Deceives; Precious Metals Mine Supply Threatened - 17 Feb 19
After 8 Terrific Weeks for Stocks, What’s Next? - 16th Feb 19
My Favorite Real Estate Strategies: Rent to Live, Buy to Rent - 16th Feb 19
Schumer & Sanders Want One Thing: Your Money - 16th Feb 19
What Could Happen When the Stock Markets Correct Next - 16th Feb 19
Bitcoin Your Best Opportunity Outside of Stocks - 16th Feb 19
Olympus TG-5 Tough Camera Under SEA Water Test - 16th Feb 19
"Mi Amigo" Sheffield Bomber Crash Memorial Site Fly-past on 22nd February 2019 VR360 - 16th Feb 19
Plunging Inventories have Zinc Bulls Ready to Run - 15th Feb 19
Gold Stocks Mega Mergers Are Bad for Shareholders - 15th Feb 19
Retail Sales Crash! It’s 2008 All Over Again for Stock Market and Economy! - 15th Feb 19
Is Gold Market 2019 Like 2016? - 15th Feb 19
Virgin Media's Increasingly Unreliable Broadband Service - 15th Feb 19
2019 Starting to Shine But is it a Long Con for Stock Investors? - 15th Feb 19
Gold is on the Verge of a Bull-run and Here's Why - 15th Feb 19
Will Stock Market 2019 be like 1999? - 14th Feb 19
3 Charts That Scream “Don’t Buy Stocks” - 14th Feb 19
Capitalism Isn’t Bad, It’s Just Broken - 14th Feb 19
How To Find High-Yield Dividend Stocks That Are Safe - 14th Feb 19
Strategy Session - How This Stocks Bear Market Fits in With Markets of the Past - 14th Feb 19
Marijuana Stocks Ready for Another Massive Rally? - 14th Feb 19
Wage Day Advance And Why There is No Shame About It - 14th Feb 19
Will 2019 be the Year of the Big Breakout for Gold? - 13th Feb 19
Earth Overshoot Day Illustrates We are the Lemmings - 13th Feb 19
A Stock Market Rally With No Pullbacks. What’s Next for Stocks - 13th Feb 19
Where Is Gold’s Rally in Response to USD Weakness? - 13th Feb 19
US Tech Stock Sector Setting Up for A Momentum Breakout Move - 12th Feb 19
Key Support Levels for Gold Miners & Gold Juniors - 12th Feb 19
Socialist “Green New Deal” Points the Way to Hyperinflation - 12th Feb 19
Trump’s Quest to Undermine Multilateral Development Banks - 12th Feb 19
Sheffield B17 US Bomber Crash 75th Anniversary Fly-past on 22nd February 2019 Full Details - 12th Feb 19
The 2 Rules For Successful Trading - 12th Feb 19 -
Financial Sector Calls Gold ‘Shiny Poo.’ Are They Worried? - 11th Feb 19
Stocks Bouncing, but Will They Resume the Uptrend? - 11th Feb 19

Market Oracle FREE Newsletter

The Real Secret for Successful Trading

More Market Uncertainty as Stocks Keep Bouncing Up and Down

Stock-Markets / Stock Markets 2018 Jun 28, 2018 - 04:07 PM GMT

By: Paul_Rejczak

Stock-Markets

Wednesday's trading session was bearish, as the main U.S. stock market indexes reversed their intraday uptrend and closed lower. Stocks bounced off the support level following Monday's sell-off, but they failed to continue higher. Will the market continue lower today? There are still two possible medium-term scenarios.

The U.S. stock market indexes lost between 0.7% and 1.5% on Wednesday, as the investors' sentiment worsened again. The S&P 500 index remains close to 2,700 mark and it currently trades 6.0% below the January's 26th record high of 2,872.87. The Dow Jones Industrial Average lost 0.7% and the technology Nasdaq Composite lost 1.5%, as it was relatively weaker than the broad stock market on Wednesday.


The nearest important level of resistance of the S&P 500 index remains at around 2,740-2,750, marked by the previous support level along with Monday's daily gap down of 2,742.94-2,752.68. The next resistance level is at 2,780-2,800, On the other hand, the support level is at around 2,695-2,700, marked by Monday's daily low. The support level is also at 2,675-2,680, marked by the late May local low.

The broad stock market accelerated its short-term downtrend on Monday, as the S&P 500 index fell the lowest since the end of May. Will the downtrend continue? Or was it some final panic selling before an upward reversal? It's hard to say. If the index breaks below 2,700 mark, we could see more downward action. There are still two possible medium-term scenarios - bearish that will lead us below the February low following trend line breakdown, and the bullish one in a form of medium-term double top pattern or a 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). The S&P 500 index broke below its two-month-long upward trend line recently:

More Uncertainty Along the Support Level

Expectations before the opening of today's trading session are slightly positive, because the index futures contracts trade 0.3% higher vs. their yesterday's closing prices. The European stock market indexes have lost 0.1-0.5% so far. Investors will wait for some economic data announcements: Final GDP number, Initial Claims at 8:30 a.m. The broad stock market will probably extend its short-term fluctuations along the support level today. We may see more short-term uncertainty. Is this some bottoming pattern before an upward reversal or just a relatively flat correction before another leg lower? For now, it looks like a correction within a short-term downtrend. There have been no confirmed positive signals so far.

The S&P 500 futures contract trades within an intraday consolidation following yesterday's intraday sell-off. The nearest important level of support is at around 2,700, marked by the local low. On the other hand, the nearest important level of resistance is at around 2,730-2,740, marked by the local highs. The futures contract remains close to the level of 2,700, as we can see on the 15-minute chart:

Nasdaq Still at 7,000 Mark

The technology Nasdaq 100 futures contract follows a similar path, as it trades within an intraday consolidation. It retraced its yesterday's advance following bouncing off the resistance level of around 7,100-7,150. On the other hand, support level remains at the above-mentioned 7,000 mark. The level of support is also at 6,900. The Nasdaq futures contract trades along its short-term downward trend line, as the 15-minute chart shows:

Apple, Amazon - Trending Lower?

Let's take a look at Apple, Inc. stock (AAPL) daily chart (chart courtesy of http://stockcharts.com). It trades within a short-term downtrend since the beginning of the month. The decline accelerated on Monday, as price got closer to a potential support level of $180. Then it rebounded and got close to its downward trend line again. Will it continue lower? There have been no confirmed short-term positive signals so far:

Now let's take a look at Amazon.com, Inc. stock (AMZN) daily chart. It reached the new record high on Thursday a week ago, as it was relatively much stronger than the broad stock market. Then it reversed its uptrend on Friday and accelerated lower on Monday. We saw negative technical divergences in the recent days. They signaled a potential downward reversal. The level of resistance is now at around $1,700. We saw a potential upward reversal pattern (bullish harami) yesterday morning, but yesterday's price action didn't confirm it:

Dow Jones Below its 200-day Moving Average

The Dow Jones Industrial Average broke below its two-month-long upward trend line more than a week ago. Then it continued lower, as it fell below the level of 24,500 on Thursday. The blue-chip index accelerated its short-term downtrend on Monday. There is a potential support level at around 24,000-24,250, but the market seems to be breaking below its 200-day moving average:

The S&P 500 index fell the lowest since the end of May on Monday. Then it rebounded slightly on Tuesday. Yesterday it came back to the level of 2,700. Is this a new downtrend or just downward correction within the medium-term consolidation? The market may extend its decline, but there is a potential level of support of around 2,700. We may see some short-term uncertainty here. There have been no confirmed positive signals so far.

Concluding, the broad stock market will likely open slightly higher today. Then the S&P 500 index may continue to fluctuate along the support level of 2,700. If it breaks lower, we could see more selling pressure. For now, it looks like a downward correction within the medium-term consolidation.

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

© 2005-2019 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

6 Critical Money Making Rules