Best of the Week
Most Popular
1. Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - P_Radomski_CFA
2.Fed Balance Sheet QE4EVER - Stock Market Trend Forecast Analysis - Nadeem_Walayat
3.UK House Prices, Immigration, and Population Growth Mega Trend Forecast - Part1 - Nadeem_Walayat
4.Gold and Silver Precious Metals Pot Pourri - Rambus_Chartology
5.The Exponential Stocks Bull Market - Nadeem_Walayat
6.Yield Curve Inversion and the Stock Market 2019 - Nadeem_Walayat
7.America's 30 Blocks of Holes - James_Quinn
8.US Presidential Cycle and Stock Market Trend 2019 - Nadeem_Walayat
9.Dear Stocks Bull Market: Happy 10 Year Anniversary! - Troy_Bombardia
10.Britain's Demographic Time Bomb Has Gone Off! - Nadeem_Walayat
Last 7 days
Stock Market Pause Should Extend - 21st April 19
Why Gold Has Been the Second Best Asset Class for the Last 20 Years - 21st April 19
Could Taxing the Rich Solve Income Inequality? - 21st April 19
Stock Market Euphoria Stunts Gold - 20th April 19
Is Political Partisanship Killing America? - 20th April 19
Trump - They Were All Lying - 20th April 19
The Global Economy Looks Disturbingly Like Japan Before Its “Lost Decade” - 19th April 19
Growing Bird of Paradise Strelitzia Plants, Pruning and Flower Guide Over 4 Years - 19th April 19
S&P 500’s Downward Reversal or Just Profit-Taking Action? - 18th April 19
US Stock Markets Setting Up For Increased Volatility - 18th April 19
Intel Corporation (INTC) Bullish Structure Favors More Upside - 18th April 19
Low New Zealand Inflation Rate Increases Chance of a Rate Cut - 18th April 19
Online Grocery Shopping Will Go Mainstream as Soon as This Year - 17th April 19
America Dancing On The Crumbling Precipice - 17th April 19
Watch The Financial Sector For The Next Stock Market Topping Pattern - 17th April 19
How Central Bank Gold Buying is Undermining the US Dollar - 17th April 19
Income-Generating Business - 17th April 19
INSOMNIA 64 Birmingham NEC Car Parking Info - 17th April 19
Trump May Regret His Fed Takeover Attempt - 16th April 19
Downside Risk in Gold & Gold Stocks - 16th April 19
Stock Market Melt-Up or Roll Over?…A Look At Two Scenarios - 16th April 19
Is the Stock Market Making a Head and Shoulders Topping Pattern? - 16th April 19
Will Powell’s Dovish Turn Support Gold? - 15th April 19
If History Is Any Indication, Stocks Should Rally Until the Fall of 2020 - 15th April 19
Stocks Get Closer to Last Year’s Record High - 15th April 19
Oil Price May Be Setup For A Move Back to $50 - 15th April 19
Stock Market Ready For A Pause! - 15th April 19
Shopping for Bargain Souvenirs in Fethiye Tuesday Market - Turkey Holidays 2019 - 15th April 19
From US-Sino Talks to New Trade Wars, Weakening Global Economic Prospects - 14th April 19
Stock Market Indexes Race For The New All-Time High - 14th April 19
Why Gold Price Will “Just Explode… in the Blink of an Eye” - 14th April 19

Market Oracle FREE Newsletter

Top 10 AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

S&P 500 Just 2% Below Record High, But There's More Stock Market Uncertainty

Stock-Markets / Stock Markets 2018 Jul 19, 2018 - 06:02 PM GMT

By: Paul_Rejczak

Stock-Markets

Stocks were basically unchanged on Wednesday, as investors took short-term profits off the table following the recent rally. Is this a topping pattern before downward reversal, or just a quick flat correction before another leg up? Will quarterly earnings releases drive the market higher?

The U.S. stock market indexes were mixed between 0.0% and 0.3% on Wednesday, as investors' sentiment remained pretty bullish following the recent rally. The S&P 500 index reached the highest since the early February, as it slightly extended its short-term uptrend yesterday. It currently trades just 2.0% below the January's 26th record high of 2,872.87. The Dow Jones Industrial Average gained 0.3% and the technology Nasdaq Composite was unchanged on Wednesday.


The nearest important level of support of the S&P 500 index remains at around 2,790-2,800, marked by the previous resistance level. The next level of support is at 2,780-2,785, marked by the recent local lows. The support level is also at 2,765-2,770, marked by last week's Wednesday's local low along with last week's Monday's daily gap up of 2,764.41-2,768.51. On the other hand, a potential resistance level is at 2,835-2,850, marked by January the 30th daily gap down of 2,837.75-2,851.48.

The broad stock market extended its short-term uptrend yesterday, as the S&P 500 index reached new local high above the level of 2,815. It is getting closer to the January topping pattern of around 2,840-2,870. Will it continue towards new record highs? 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. The latter one is getting more and more real. The S&P 500 index seems to be "climbing a wall of worries" here:

Slightly Above 2,800

The index futures trade between -0.2% and -0.3% vs. their yesterday's closing price, so expectations before the opening of today's trading session are negative. The European stock market indexes have been mixed so far. Investors will wait for the economic data announcements today: Philadelphia Fed Manufacturing Index, Initial Claims at 8:30 a.m., Leading Indicators at 10:00 a.m. Investors will also wait for quarterly earnings release from Microsoft, among others. The S&P 500 index will probably extend its short-term fluctuations along the level of 2,800 today. There have been no confirmed negative signals. For now, it looks like a relatively flat correction within an uptrend.

The S&P 500 futures contract trades within an intraday downtrend following yesterday's intraday downward reversal. The market bounced off resistance level of around 2,815-2,820. On the other hand, the support level remains at 2,800-2,805. The next level of support is at 2,790, marked by the recent local low. The futures contract continues to trade slightly above 2,800 mark, as we can see on the 15-minute chart:

Nasdaq Also Lower

The technology Nasdaq 100 futures contract follows a similar path, as it retraces its yesterday's intraday advance. Is this a new short-term downtrend or just consolidation? The market is still around 1% below Tuesday's record high of 7,437. The nearest important level of support is at 7,350-7.380. The next support level is at around 7,300, among others. The Nasdaq futures contract backs off from the new record high, as the 15-minute chart shows:

Amazon at another New Record High, Apple Lags

Let's take a look at Apple, Inc. stock (AAPL) daily chart (chart courtesy of http://stockcharts.com). The stock slightly extended its advance last week, but it still trades at the resistance level of around $190-195. On the other hand, support level remains at around $185, marked by the previous level of resistance:

Now let's take a look at Amazon.com, Inc. stock (AMZN) daily chart. It reached another new record high yesterday at the price of $1,858.88. The bull market seems unstoppable here, but there are still negative medium-term technical divergences. However, there have been no confirmed negative signals so far:

Blue-Chip Stocks Continue Higher

The Dow Jones Industrial Average extended its short-term uptrend yesterday, following the recent breakout above the level of 25,000. The market gets closer to the early June topping pattern. And we may see some uncertainty there:

The S&P 500 index extended its short-term uptrend yesterday. So the broad stock market continues retracing its January's-February's sell-off. But will it reach new record highs? There have been no confirmed negative signals so far. However, we may see some short-term consolidation along the level of 2,800.

Concluding, the broad stock market will likely open slightly lower today. The S&P 500 index may fluctuate along the level of 2,800 for a while. Investors will wait for the economic data announcements along with quarterly earnings releases.

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