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

Stock Market Going Sideways - Which Direction is Next?

Stock-Markets / Stock Markets 2018 Nov 19, 2018 - 01:00 PM GMT

By: Paul_Rejczak

Stock-Markets

Friday's trading session was mixed, as investors continued to hesitate following the recent decline. The S&P 500 index extends its month-long fluctuations along the level of 2,700. Is this some medium-term bottoming pattern?

The U.S. stock market indexes were mixed between -0.2% and +0.5% on Friday, extending their short-term fluctuations, as investors continued to hesitate following last week's sell-off. The S&P 500 index remains above 2,700 mark after bouncing off the support level on Wednesday-Thursday. The index was 11.5% below September the 21st record high of 2,940.91 three weeks ago. And now it trades 7.0% below the all-time high. The Dow Jones Industrial Average gained 0.5% and the Nasdaq Composite lost 0.2% on Friday.


The nearest important level of resistance of the S&P 500 index remains at around 2,750-2,775, marked by the recent support level and the short-term local highs. The next resistance level is at 2,795-2,800, marked by Friday's daily gap down of 2,794.10-2,794.99, among others. The resistance level is also at 2,815-2,820, marked by the mid-October local high of 2,816.94. On the other hand, the support level remains at 2,700, marked by the previous short-term consolidation. The next support level is at 2,685, marked by the late October daily gap up. The support level is also at 2,600-2,630, marked by the late October lows.

The broad stock market extended its downtrend three weeks ago, as the S&P 500 index fell closer to 2,600 mark. Since then it fluctuates within a relatively wide trading range following the recent advance above the level of 2,800. On Wednesday and on Thursday the index fell below 2,700 and it is trading close to the long-term upward trend line again:

Short-Term Consolidation

Expectations before the opening of today's trading session are negative, because the index futures contracts trade 0.4% below their Friday's closing prices. The European stock market indexes have been mixed so far. Investors will wait for the NAHB Housing Market Index release at 10:00 a.m. The broad stock market will likely continue its short-term fluctuations this morning. We may see another attempt at breaking above the resistance level. However, there have been no confirmed short-term positive signals so far.

The S&P 500 futures contract trades within an intraday consolidation, as it remains within its late Friday's intraday consolidation. The nearest important level of resistance is now at around 2,745-2,750, marked by some previous local highs. On the other hand, the support level is at 2,690-2,700. The futures contract trades along its last week's local highs, as we can see on the 15-minute chart:

Nasdaq Still Below 7,000

The technology Nasdaq 100 futures contract follows a similar path, as it extends its short-term fluctuations. On Friday investors reacted to worse-than-expected quarterly earnings release from NVIDIA Corp., but the tech stocks' gauge remained virtually flat. It continues to fluctuate following the recent breakdown below 2,700 mark. The nearest important resistance level remains at 6,900-7,000. On the other hand, the support level is at 6,750-6,800. The Nasdaq futures contract extends its short-term consolidation, as the 15-minute chart shows:

Big Cap Tech Stocks Bouncing - Upward Correction?

Let's take a look at Apple, Inc. stock (AAPL) daily chart (chart courtesy of http://stockcharts.com). The stock accelerated the downtrend a week ago following breaking down below the support level of around $200. It was relatively weaker than the broad stock market recently, as investors continued to react to the quarterly earnings release. The stock fell the lowest since July. The nearest important level of support is at $185. We may see attempts at bouncing off that support level:

Now let's take a look at Amazon.com, Inc. stock (AMZN) daily chart. It accelerated its sell-off following quarterly earnings release in the late October. The stock continued lower, but then it bounced off the support level of $1,500. The price reached a potential resistance level of around $1,750-1,800 before reversing lower. Last week the stock retraced some more of its recent advance. For now, it looks like a downward correction:

Dow Jones Remains Above 25,000

The Dow Jones Industrial Average fell below 25,000 mark on Thursday, before bouncing off the support level and closing higher. It continued higher on Friday. Recently it accelerated above 26,000 mark and got closer to the early October topping consolidation. Then the blue-chip stocks gauge retraced most of the rally. The nearest important level of resistance is now at 25,750-26,000, and the support level remains at 24,750-25,000:

Japanese Nikkei - Narrow Trading Range

Let's take a look at the Japanese Nikkei 225 index now. It retraced more of its October sell-off recently, but then it failed to continue higher following bouncing off the resistance level at 22,500. Then we saw more downward action. The Nikkei continues to trade below its broken long-term upward trend line. It is still at the October the 25th daily gap down:

The S&P 500 index extended its short-term downtrend last week, as it fell below 2,700 mark on Wednesday and on Thursday. On Friday the broad stock market bounced, but it continued to trade below the short-term local highs. On the other hand, the index continues to trade above the support level of the October the 31st daily gap up.

Concluding, the S&P 500 index will probably open lower today and it will likely extend its last week's short-term consolidation. For now it looks like consolidation within a downtrend. We may see more short-term volatility.

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