Wednesday’s trading session was mixed, as investors hesitated following the recent rally. However, the S&P 500 was the highest since the early October yesterday, following last week’s breakout above the 2,900 level. Will the uptrend continue despite some technical overbought conditions?

The U.S. stock market indexeswere mixed between -0.2% and 0.0% on Wednesday, as investors took short-term profits off the table following the recent rally. The S&P 500 index retraced more of its October-December downward correction of 20.2% yesterday before reversing its intraday upward course. Last Friday it broke above the 2,900 level. The broad stock market's gauge is now just1.4% below September the 21st record high of 2,940.91. The Dow Jones Industrial Average was unchanged and the Nasdaq Compositelost 0.1%on Wednesday.

The nearest important resistance level of the S&P 500 index remainsat 2,920-2,940, marked by the mentioned record high, among others. On the other hand, the support level isat 2,900, marked by the recent resistance level. The support level is also at 2,860-2,865, marked by the recent local lows.

The broad stock market retraced all of its December sell-off and it broke above the medium-term resistance level of around 2,900 last week. So is it still just a correction or a new medium-term uptrend? We may see an attempt at getting back to the record high. There have been no confirmed negative medium-termsignals so far. The index got closer to its last October all-time high, as we can see on the daily chart:

Stock

Short-Term Consolidation

Expectations before the opening of today's trading session are virtually flat, because the index futures contracts trade 0.1%below their Wednesday’s closing prices. The European stock market indexes have been mixed so far. Investors will wait for series of economic data announcements today: Retail Sales, Philly Fed Manufacturing Index, Unemployment Claims at 8:30 a.m., Flash Manufacturing PMI, Flash Services PMI at 9:45 a.m., Business Inventories, CB Leading Index at 10:00 a.m. They will also wait for more quarterly corporate earnings releases. Stocks will likely continue to fluctuate along the local highs today. There have been no confirmed negative signals so far. However, we could see some more uncertainty as the broad stock market’s gauge gets closer to the mentioned September’s record high.

The S&P 500 futures contract trades within an intraday uptrend, as it retraces some of its overnight decline. The nearest important resistance level is at around 2,900-2,910. On the other hand, the support level is at 2,890, marked by the local low. The futures contract trades along its previous local highs, as the 15-minute chart shows:

Stock

Nasdaq Slightly Below 7,700 Mark

The technology Nasdaq 100 futures contract follows a similar path, as it trades within an intraday uptrend.The market retraces some of its overnight decline. The nearest important resistance level is at around 7,700-7,750. On the other hand, the support level is at 7,600-7,650. The Nasdaq futures contractremains close to the short-term upward trend line, as we can see on the 15-minute chart:

Stock

Microsoft at New Record High Again, Apple Above $200

Let's take a look at the Apple, Inc. stock (AAPL) daily chart (chart courtesy of http://stockcharts.com). The stock accelerated its uptrend recentlyand it got close to the $200 level.Yesterday the marketbounced offits upward trend line and reached the new medium-term high:

AAPL

Now let's take a look at the daily chart of Microsoft Corp. (MSFT). The stock reachedyet another new record high yesterday. The market continues to trade alongthe three-month-long upward trend line:

MSFT

Dow Jones Going Sideways

The Dow Jones Industrial Averagebroke above its February local highrecently and it extendedthe medium-term uptrend. The next resistance level is at around 26,800-27,000, marked by the last year’s topping pattern and the record high of 26,951.8. Yesterday the blue-chip stocks’ gauge reached a new medium-term high. There have been no confirmed negative signals so far. However, we can see some negative technical divergences:

INDU

Nikkei – Uncertainty Following Monday’s Rally

Let's take a look at the Japanese Nikkei 225 index. It accelerated the downtrend in late December, as it fell slightly below the 19,000 level. Then it was retracing the downtrend for two months. In March the market went sideways. Recently the index got close to 21,500-22,000 again. And on Monday it broke above the 22,000 mark:

Stock

The S&P 500 index extended its medium-term uptrend yesterday, as it got the highest since the early October. Then the broad stock market retraced some of its recent advance, as investors took short-term profits off the table. We previously wrote that it looked like a flat correction within an uptrend. And it did. But will the market reach the September’s record high? We may see some profit-taking action, as stocks trade closer to their resistance levels.

Concluding, the S&P 500 index will likely open virtually flat today.We may see some moreuncertainty, as the broad stock markettrades closer to itsSeptember’s record high. Investors will await economic data and quarterly corporate 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.

All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' employees and 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, Przemyslaw Radomski, CFA 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. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA 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. Przemyslaw Radomski, CFA, 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.

Analysis feed

Latest Forex Analysis

Editors’ Picks

EUR/USD: risk-off taking over on trade war escalation

The American Dollar sold off Friday, following US President Trump´s anger discharge on Twitter. The pair soared to 1.1152, its highest for the week, to finally settle at around 1.1140.

EUR/USD News

GBP/USD: Johnson and Tusk engaged in the blame-game

The GBP/USD pair flirted with the 1.2300 figure late Friday, ending the week with substantial gains around 1.2280, backed by Brexit hopes and the dollar’s broad weakness.

GBP/USD News

USD/JPY: lower lows at sight on the run to safety

The USD/JPY pair sunk Friday, following US President Trump’s fury with China and Fed’s head Powell, as the market rushed into safety. US yield curve inverted again, fears of recession rule.

USD/JPY News

Powell powerless against Trump's trade wars – US braces for recession, USD set to move

"The most powerful central banker in the world" – is how we and others characterize Fed Chair Jerome Powell. While that may be true – monetary policy is reaching its limits – especially in the face of a trade war.

Read more

Gold gains more than $30, eyes 2019 highs on Trump’s tweet

Gold continues to rise sharply amid concerns about the impact of the escalation in the US-China trade war. The demand for safe-haven assets emerged over the last hours, leading to a rally in the yellow metal. 

Gold News

Majors

Cryptocurrencies

Signatures