Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market Upward Reversal or Just Rebound?

Stock-Markets / Stock Markets 2018 Sep 10, 2018 - 04:15 PM GMT

By: Paul_Rejczak

Stock-Markets

The broad stock market slightly extended its short-term downtrend on Friday, as investors continued taking profits off the table after the recent record-breaking rally. However, the S&P 500 index remains relatively close to its record high. Is this a topping pattern or just a pause before another leg up?

The U.S. stock market indexes lost 0.2-0.3% on Friday, slightly extending their short-term downtrend, as investors reacted to the monthly jobs data release. The S&P 500 index has reached the record high of 2,916.50 on August the 29th. It currently trades 1.5% below that high. Both, Dow Jones Industrial Average and the technology Nasdaq Composite lost 0.3% on Friday.


The nearest important level of support of the S&P 500 index is now at around 2,855-2,860, marked by the previous short-term local lows. The support level is also at 2,830-2,835. On the other hand, the nearest important level of resistance is at 2,885, marked by the previous support level. The next resistance level is at 2,900. The resistance level is also at 2,910-2,915, marked by the mentioned late August record high.

The broad stock market reached the new record high in the late August, as it extended its short-term uptrend above the level of 2,900. Since then it trades within a downward correction. The market retraced its late August advance, and it got back down to the support of its late January high. Will it continue lower or reverse higher towards the all-time high? For now, it looks like a downward correction within an uptrend. The index continues to trade above its medium-term upward trend line, as we can see on the daily chart:

Reversing Upwards?

The index futures contracts trade 0.4-0.6% above their Friday's closing prices this morning. So, expectations before the opening of today's trading session are positive. The European stock market indexes have gained 0.3-0.5% so far. There will be no new important economic data announcements today. The broad stock market will probably continue to fluctuate following the recent run-up. For now, it looks like a correction within an uptrend. There have been no confirmed negative signals so far.

The S&P 500 futures contract trades within an intraday uptrend, as it retraces some of its Friday's decline. consolidation following its yesterday's intraday decline. The nearest important level of resistance is now at around 2,890-2,895, marked by the local highs. The next resistance level is at 2,900. On the other hand, the support level is at 2,875, among others. The futures contract trades at its short-term downward trend line, as the 15-minute chart shows:

Nasdaq Still Below 7,500 Mark

The technology Nasdaq 100 futures contract follows a similar path, as it retraces some of its Friday's decline. It remains relatively weaker than the broad stock market following almost 4% downward correction off its August the 30th record high of around 7,700. The nearest important support level is now at 7,390-7,420. On the other hand, the level of resistance is at 7,480-7,500, among others. The Nasdaq futures contract is now above its recent downward trend line, as we can see on the 15-minute chart:

Apple, Amazon - New Downtrend or Just Correction?

Let's take a look at Apple, Inc. stock (AAPL) daily chart (chart courtesy of http://stockcharts.com). It reached the new record high at the level of $229.67 on Wednesday before reversing its intraday uptrend and closing lower. Then it broke below its month-long upward trend line. The nearest important level of support is at $215-220, marked by the recent consolidation. It looks like a short-term downward reversal:

Now let's take a look at Amazon.com, Inc. stock (AMZN) daily chart. It has reached the new record high at the price of $2,050.50 almost a week ago on Tuesday. Since then it is retracing its recent rally. The stock broke below the month-long upward trend line. We still can see negative technical divergences. It looks like a topping pattern:

Dow Jones Continues to Fluctuate

The Dow Jones Industrial Average fluctuates following its August advance. The blue-chip stocks' gauge continues to trade along the level of 26,000. But it is still way below its late January record high of 26,616.71. The nearest important level of resistance is at 26,340-26,440, marked by the late January daily gap down. The index remains above its two-month long upward trend line, as the daily chart shows:

The S&P 500 index reached the new record high at the level of 2,916.50 in the late August. Since then the broad stock market retraced some of its rally and it got back below 2,900 mark. Was it a meaningful downward reversal or just a correction before another leg up? There have been no confirmed negative signals so far. However, we can see some short-term overbought conditions along with negative technical divergences.

Concluding, the S&P 500 index will likely open slightly higher today. Then it may extend its short-term fluctuations following the late August record-breaking rally. For now, it looks like a downward correction within an uptrend from the August local low of around 2,800. There have been no confirmed negative medium-term signals so far.

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

© 2005-2022 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