Stocks broke above their consolidation yesterday. Is this an upward reversal or just another upward correction? The NFP release leaves question marks.

The S&P 500 index gained 0.83% on Thursday following breaking above the recent local highs and the 4,400 price level. The market retraced most of its late September’s decline yesterday as investors awaited today’s monthly jobs data release, among other factors. The Nonfarm Payrolls release has been worse than expected at +194,000. However, the main indices are expected to open 0.1-0.5% higher this morning.

The support level is now at 4,365-4,385, marked by yesterday’s daily gap up of 4,365.57-4,383.73. On the other hand, the resistance level is at 4,430-4,450. The S&P 500 broke above its month-long downward trend line, as we can see on the daily chart.

SPX

S&P 500 remains above medium-term support level

The S&P 500 index is trading below its almost year-long upward trend line. The nearest important medium-term support level remains at 4,200-4,300, as we can see on the weekly chart:

SPX

Dow Jones got back to its downward trend line

Let’s take a look at the Dow Jones Industrial Average chart. The blue-chip index also broke above its short-term consolidation yesterday. However, it remained below a month-long downward trend line. The nearest important resistance level is at 35,000, as we can see on the daily chart:

INDU

Apple is back above $142 price level again

Apple stock weighs around 6.1% in the S&P 500 index, so it is important for the whole broad stock market picture. The stock broke above $142 price level yesterday but for now it looks like a correction within a downtrend or a consolidation following the September’s decline. The resistance level is now at $144, marked by the previous local highs.

AAPL

Conclusion

The S&P 500 index has been trading within a short-term consolidation since last Thursday. Yesterday the index broke above that consolidation and it got back above the 4,400 level. For now it looks like an upward correction following the late September’s declines.

The risk/reward perspective seems less favorable right now and no positions are currently justified.

Here’s the breakdown:

  • The S&P 500 broke above its week-long consolidation, but bulls are not out of the woods yet, as the worse-than- expected jobs data release may lead to some more uncertainty.

  • Our speculative short position has been closed last Friday at a much lower level.

  • We are still expecting more downward pressure and a correction to 4,200-4,250 level.


Want free follow-ups to the above article and details not available to 99%+ investors? Sign up to our free newsletter today!

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.

Feed news

Latest Forex Analysis


Latest Forex Analysis

Editors’ Picks

EUR/USD hovers around 1.1350 as investors ignore yields

US Treasury yields reached fresh weekly highs but fell short of underpinning the greenback. EUR/USD firmly advanced to a fresh weekly high, although a substantial advance is still unclear. 

EUR/USD News

GBP/USD plummets to fresh 2021 lows sub-1.3200

The greenback recovers its poise as the mood partially sours, sending GBP/USD to its lowest since December 2020. Impending Brexit risks and rising covid cases in the UK weigh on the pound, fueled by persistent uncertainty about the Omicron variant.

GBP/USD News

Gold: Greenback slides and offsets rising US yields

Gold is flat and sideways in consolidating markets awaiting a catalyst. Gold is consolidating in the $1,779 and $1,793 range with markets trying to assess the outlook with regards to inflation, central banks and the uncertainty surrounding the Covid-19 variant.

Gold News

Cardano price in phenomenal buying zone as ADA targets $3

A brief technical and on-chain analysis on Cardano price. Here, FXStreet's analysts evaluate different patterns and indicators that suggest ADA is primed to advance further.

Read more

Cyber Monday 2021 Discounts!

Glued to your trading screen on Cyber Monday? Upgrade your skills by signing up for FXStreet’s Premium service, offered at a discount of up to 50%. Fellow traders have already taken advantage of Black Friday profits. What about you? 

Subscribe now!

Majors

Cryptocurrencies

Signatures