Best of the Week
Most Popular
1. Dollargeddon - Gold Price to Soar Above $6,000 - P_Radomski_CFA
2.Is Gold Price On Verge Of A Bottom, See For Yourself - Chris_Vermeulen
3.Dow Stock Market Trend Forecast 2018 - Nadeem_Walayat
4.Gold Price to Plunge Below $1000 - Key Factors for Gold & Silver Investors - P_Radomski_CFA
5.Why The Uranium Price Must Go Up - Richard_Mills
6.Dow Stock Market Trend Forecast 2018 - Video - Nadeem_Walayat
7.Jim Rogers on Gold, Silver, Bitcoin and Blockchain’s “Spectacular Future” - GoldCore
8.More Signs That the Stock Market Will Rally Until 2019 - Troy_Bombardia
9.It's Time for A New Economic Strategy in Turkey - Steve_H_Hanke
10.Fiat Currency Inflation, And Collapse Insurance - Raymond_Matison
Last 7 days
Gold – “Make Me Feel Good…Tell Me Anything” - 25th Sept 18
Sector Rotation Continues. Bullish for Stocks - 25th Sept 18
Whose Trillion is it Anyway? US Federal Government Shocker! - 25th Sept 18
Focus on the Stock Market’s Price Action and Ignore the Failed Hindenburg Omen - 25th Sept 18
5 Problems All Restaurant Owners Will Face - 25th Sept 18
Gold Price Trend Forecast 2018 - Video - 25th Sept 18
How the US Dollar Penalizes Emerging Asia - 24th Sep18
Stock Market Macro/Macro View: Waves and Cycles Part II - 24th Sep18
DJIA Makes New High  - 24th Sep18
Gold Price Trend Forecast 2018 - 24th Sep18
The Stock Market Has Been Exceptionally Strong this September. What’s Next for Q4 2018 - 24th Sep18
Gold / US Dollar Inverse Trend Relationship Video - 23rd Sep 18
US and Global Stocks, Commodities, Precious Metals and the ‘Anti-USD’ Trade - 23rd Sep 18
Gerald Celente Warns Fed May Bring Down the Economy, Crash Markets - 23rd Sep 18
Top 3 Side Jobs for Day Traders - 23rd Sep 18
Gold Exodus to Reverse - 22nd Sep 18
Bitcoin Trader SCAM WARNING - Peter Jones, Dragons Den Fake Facebook Ads - 22nd Sep 18
China Is Building the World’s Largest Innovation Economy - 21st Sep 18
How Can New Companies Succeed in the Overcrowded Online Gambling Market? - 21st Sep 18
Golden Sunsets in the Land of U.S. Dollar Hegemony - 20th Sep 18
5 Things to Keep in Mind When Buying a Luxury Car in Dubai - 20th Sep 18
Gold Price Seasonal Trend Analysis - Video - 20th Sep 18
The Stealth Reason Why the Stock Market Keeps On Rising - 20th Sep 18
Sheffield School Applications Crisis Eased by New Secondary Schools Places - 20th Sep 18
Precious Metals Sector: It’s 2013 All Over Again - 19th Sep 18
US Dollar Head & Shoulders Triggered. What's Next? - 19th Sep 18
Prepare for the Stock Market’s Volatility to Increase - 19th Sep 18
The Beginning of the End of the Dollar - 19th Sep 18
Land Rover Discovery Sport 'Approved Used' Bad Paint Job - Inchcape Chester - 19th Sep 18
Are Technology and FANG Stocks Bottoming? - 18th Sep 18
Predictive Trading Model Suggests Falling Stock Prices During US Elections - 18th Sep 18
Lehman Brothers Financial Collapse - Ten Years Later - 18th Sep 18
Financial Crisis Markets Reality Check Now in Progress - 18th Sep 18
Gold’s Ultimate Confirmation - 18th Sep 18
Omanization: a 20-year Process to Fight Volatile Oil Prices  - 18th Sep 18
Sheffield Best Secondary Schools Rankings and Trend Trajectory for Applications 2018 - 18th Sep 18
Gold / US Dollar Inverse Correlation - 17th Sep 18
The Apple Story - Trump Tariffs Penalize US Multinationals - 17th Sep 18
Wall Street Created Financial Crash Catastrophe Ten Years Later - 17th Sep 18
Trade Wars Are Going To Crash This Stock Market - 17th Sep 18
Why Is Apple Giving This Tiny Stock A $900 Million Opportunity? - 17th Sep 18
Financial Markets Macro/Micro View: Waves and Cycles - 17th Sep 18
Stock Market Bulls Prevail – for Now! - 17th Sep 18
GBPUSD Set to Explode Higher - 17th Sep 18
The China Threat - Global Crisis Hot Spots & Pressure Points - 17th Sep 18 - Jim_Willie_CB

Market Oracle FREE Newsletter

Trading Any Market

Stock Market Downtrend to Continue?

Stock-Markets / Stock Markets 2018 Aug 13, 2018 - 03:56 PM GMT

By: Paul_Rejczak

Stock-Markets

Stocks were declining on Friday, as investors reacted to the Turkey financial crisis, among other factors. The market reversed lower following global stock markets' rout. Will uptrend reverse or is this just a downward correction before another leg up?

The U.S. stock market indexes lost 0.7-0.8% on Friday, retracing some of their early August advance, as investors reacted to global stock markets' rout. The S&P 500 index broke below its relatively narrow three-day-long trading range following bouncing off the resistance level of around 2,860-2,865. It currently trades 1.4% below the January's 26th record high of 2,872.87. The Dow Jones Industrial Average lost 0.8% and the technology Nasdaq Composite lost 0.7% on Friday.


The nearest important level of support of the S&P 500 index is now at around 2,820-2,825, marked by some previous local highs. The next support level is at 2,800. On the other hand, the nearest important level of resistance is at 2,845-2,850, marked by Friday's daily gap down of 2,842.20-2,851.98. The resistance level is also at 2,870-2,875, marked by the mentioned January's all-time high.

The broad stock market got close to its January's record high recently, as investors' sentiment improved following quarterly corporate earnings, economic data releases. The S&P 500 index traded within a relatively narrow trading range on Tuesday-Thursday's last week. Then it broke lower on Friday. Was it some medium-term downward reversal or just downward correction before another leg up? There are still two possible medium-term scenarios - bearish that will lead us towards the February low again, and the bullish one - breakout higher towards 3,000 mark. The latter one got very real recently. However, the S&P 500 index bounced of the resistance level marked by the mentioned January's record high last week:

Slightly Negative Expectations

Expectations before the opening of today's trading session are slightly negative, because the index futures contracts trade 0.3% below their Friday's closing prices. The main European stock market indexes have lost 0.3-0.7% so far. There will be no new important economic data announcements today. The broad stock market will probably fluctuate following Friday's decline. The S&P 500 index may bounce off the support level of around 2,820-2,825, marked by the previous local highs. However, there have been no confirmed short-term positive signals so far.

The S&P 500 futures contract trades within an intraday consolidation following Friday's decline. The nearest important level of support is a now at 2,820, marked by the local low. On the other hand, level of resistance is at 2,835-2,840, marked by some Friday's intraday local highs. The resistance level is also at 2,850. The futures contract trades along its short-term downward trend line, as we can see on the 15-minute chart:

Nasdaq Also Lower

The technology Nasdaq 100 futures contract follows a similar path, as it trades within an intraday consolidation. The market bounced off the resistance level of around 7,500 on Thursday, and then it continued lower on Friday. The nearest important level of support is now at around 7,380, marked by the local low. The support level is also at 7,300-7,350. On the other hand, the resistance level is at 7,430-7,440, marked by the recent fluctuations. The next level of resistance is at 7,480-7,500. The Nasdaq futures contract trades below its last week's short-term consolidation along the level of 7,480-7,500, as the 15-minute chart shows:

Big Cap Tech Stocks Still Close to Record Highs

Let's take a look at Apple, Inc. stock (AAPL) daily chart (chart courtesy of http://stockcharts.com). The stock reached new record high on Friday at the level of $209.10, but it got back lower before the session's close. It will likely retrace more of its recent rally today following the broad stock market weakness. There have been no confirmed negative signals so far. The nearest important level of support is now at $190-200, marked by the previous resistance level:

Now let's take a look at Amazon.com, Inc. stock (AMZN) daily chart. It reached yet another new record high on Thursday at the level of $1,914.57 following the recent breakout above the price of $1,850. The nearest important level of resistance remains at around $1,900-1,915. On the other hand, support level is at 1,850. The stock continues to trade above its medium-term upward trend line, as we can see on the daily chart:

Dow Jones Got Back Lower

The Dow Jones Industrial Average retraced some of its recent advance on Friday, as it got back below the level of 25,500. The blue-chip stocks' gauge continues to fluctuate following its July rally. Is this just a flat correction within an uptrend or some topping pattern before downward reversal? For now, it looks like a flat correction before another medium-term leg up, because there have been no confirmed negative signals so far:

The S&P 500 index fell below its three-day-long consolidation on Friday, as investors reacted to an overnight global stock markets' rout. The broad stock market retraced some of its early August advance. So is this a new downtrend or just downward correction? For now it looks like a downward correction, and the support level remains at around 2,800.

Concluding, the broad stock market will likely open slightly lower today. The S&P 500 index may fluctuate along its late July short-term consolidation. It may act as a support level. For now, it looks like a downward correction following the early August advance.

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

© 2005-2018 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