Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
AI Tech Stocks State Going into the CRASH and Capitalising on the Metaverse - 25th Jan 22
Stock Market Relief Rally, Maybe? - 25th Jan 22
Why Gold’s Latest Rally Is Nothing to Get Excited About - 25th Jan 22
Gold Slides and Rebounds in 2022 - 25th Jan 22
Gold; a stellar picture - 25th Jan 22
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stocks Trying to Break Higher Again, Will They?

Stock-Markets / Stock Markets 2018 Jul 12, 2018 - 03:40 PM GMT

By: Paul_Rejczak

Stock-Markets

The S&P 500 index retraced some of its recent advance yesterday, as investors reacted to overnight trade tariffs announcement. Is this a new downtrend? Or just a downward correction before another leg higher? There are still two possible medium-term scenarios.

The U.S. stock market indexes lost between 0.6% and 0.9% on Wednesday, retracing some of their recent advance, as investors reacted to new trade tariffs announcement. The S&P 500 index has bounced off the resistance level of around 2,800. It currently trades 3.4% below the January's 26th record high of 2,872.87. The Dow Jones Industrial Average lost 0.9% and the technology Nasdaq Composite lost 0.6% on Wednesday.


The nearest important level of support of the S&P 500 index is at around 2,765-2,770, marked by yesterday's local low and Monday's daily gap up of 2,764.41-2,768.51. On the other hand, the resistance level is now at around 2,785, marked by yesterday's daily gap down of 2,785.91-2,786.24. The resistance level is also at 2,795-2,800, marked by the previous local highs from February, March and June. The level of resistance is also at 2,840, marked by January the 30th daily gap down.

The broad stock market broke above its recent trading range on Friday. Is this a new uptrend or just more medium-term fluctuations following January-February sell-off? If the S&P 500 index breaks above 2,800 mark, we could see more buying pressure. Perhaps we could see a move to new record high. However, 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, but it continued to trade above the level of 2,700:

Short-term Fluctuations, Just Correction Before Another Leg Up?

The index futures contracts trade 0.5-0.7% higher vs. their yesterday's closing prices. So expectations before the opening of today's trading session are quite positive. The main European stock market indexes have gained 0.6-0.8% so far. Investors will wait for the economic data announcements today: Consumer Price Index, Initial Claims at 8:30 a.m. The broad stock market will probably retrace some of its yesterday's decline today. For now, it looks like a short-term consolidation following the recent rally.

The S&P 500 futures contract trades within an intraday uptrend, as it retraces some of its yesterday's decline. The nearest important level of resistance is at around 2,785-2,790, marked by the short-term local highs. The resistance level is also at 2,800. On the other hand, level of support is at 2,765-2,770, marked by the recent local lows. The futures contract trades above its two-session-long upward trend line, as we can see on the 15-minute chart:

Nasdaq Closer to 7,300 Again

The technology Nasdaq 100 futures contract follows a similar path, as it trades within an intraday uptrend. The market has bounced off the resistance level of around 7,300-7,360, marked by the June's record high recently. Then it traded closer to 7,200 mark, before bouncing off that support level. The nearest support level is now at around 7,250. The Nasdaq futures contract trades along the level of 7,300 again, as the 15-minute chart shows:

Apple Lower, Amazon Higher - Big Cap Tech Stocks' Mixed Picture

Let's take a look at Apple, Inc. stock (AAPL) daily chart (chart courtesy of http://stockcharts.com). The stock slightly extended its Monday's advance on Tuesday, but it came back lower yesterday. There's still the resistance level of around $190-195. On the other hand, support level is now 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 got even closer to June the 21st record high of $1,763.10 yesterday. And we still can see some medium-term negative technical divergences. Will the market reverse here? There have been no confirmed negative signals so far:

Dow Jones - Uncertainty Below 25,000 Mark

The Dow Jones Industrial Average broke below its two-month-long upward trend line in the late June. Then it continued lower, as it fell below the level of 24,500. The blue-chip index kept bouncing off a potential support level of around 24,000-24,250 recently. It continued to trade along its 200-day moving average which eventually acted as a support level. Then on Monday the index broke above the resistance level of around 24,500. It currently trades within a consolidation below the level of 25,000:

The S&P 500 index retraced some of its recent advance yesterday, as it bounced off the resistance level of around 2,800. Is this a downward reversal or just quick correction before another leg higher? If the S&P 500 index breaks above 2,800, we could see a move towards the January highs. Overall, the market is still close to breaking above its medium-term consolidation.

Concluding, the broad stock market will likely open higher today. Investors' sentiment seems quite bullish despite yesterday's trade tariffs announcement. But we may see more short-term uncertainty, as the S&P 500 index trades relatively close to the recent months' highs.

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