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

Blue Chips Take the Lead, Enough to Push Stock Market Higher?

Stock-Markets / Stock Markets 2018 Jun 07, 2018 - 12:53 PM GMT

By: Paul_Rejczak

Stock-Markets

Investors' sentiment continued to improve on Wednesday, as the broad stock market accelerated its short-term uptrend following Monday's breakout above three-week-long consolidation. The S&P 500 index gets closer to march local high. Will the uptrend continue? There are still two possible medium-term scenarios, but bulls are much happier now.

The U.S. stock market indexes gained between 0.7% and 1.4% on Wednesday, extending their short-term uptrend, as investors' sentiment continued to improve and blue-chip stocks regained their strength. The S&P 500 index broke above 2,750 mark and it currently trades just 3.5% below January's 26th record high of 2,872.87. The Dow Jones Industrial Average gained 1.4%, as it was relatively stronger than the broad stock market yesterday, and the technology Nasdaq Composite gained 0.7%.


The nearest important level of resistance of the S&P 500 index is now at around 2,780-2,800, marked by mid-March local high. The next resistance level is at 2,830-2,840, marked by the late January short-term consolidation. On the other hand, support level is at 2,750, marked by recent level of resistance. The support level is also at 2,735-2,740, marked by Monday's daily gap-up of 2,736.93-2,740.54.

The broad stock market accelerated its short-term uptrend yesterday, as the S&P 500 index broke above resistance level of 2,750. Will it continue higher despite short-term overbought conditions? We may see some uncertainty and profit taking action today. There are still two possible medium-term scenarios - bearish that will lead us below February low following trend line breakdown, and the bullish one in a form of medium-term double top pattern or 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):

Mixed Expectations, Correction or Just Pause?

The index futures contract trade between 0.0% and +0.2% vs. their yesterday's closing prices, so expectations before the opening of today's trading session are virtually flat to slightly positive. The main European stock market indexes have been mixed so far. Investors will wait for the Initial Claims number release at 8:30 a.m. The broad stock market will likely fluctuate following yesterday's advance. Will we see a downward correction at some point? The index may retrace some of its yesterday's breakout above resistance level of 2,750, but there have been no confirmed negative signals so far.

The S&P 500 futures contract trades within an intraday consolidation, as it retraces some of its overnight advance. The market bounced off resistance level at around 2,780. Potential level of resistance is also at 2,800. On the other hand, support level is at 2,770, and the next level of support is at 2,750-2,760. The futures contract continues to trade above its week-long upward trend line, as the 15-minute chart shows:

Nasdaq at New Record High

The technology Nasdaq 100 futures contract follows a similar path, as it retraces some of its overnight advance. Tech stocks gauge reached new record high, as it slightly exceeded its mid-March top. The Nasdaq 100 gained over 300 points from last Wednesday's local low. Potential level of resistance is at around 7,230, marked by new record high. On the other hand, support level is now at 7,100-7,150, among others. The Nasdaq futures contract remains above the level of 7,200, as we can see on the 15-minute chart:

Apple, Amazon at Record Highs, but Correction May Come Soon

Let's take a look at Apple, Inc. stock (AAPL) daily chart (chart courtesy of http://stockcharts.com). It reached another new record high on Wednesday, as it continued its short-term uptrend following Monday's breakout above $190. There is still a potential resistance level of around $200. Investors' sentiment is bullish, but will uptrend continue? There have been no confirmed short-term negative signals so far:

Now let's take a look at Amazon.com, Inc. stock (AMZN) daily chart. It accelerated its uptrend on Tuesday, as price got closer to $1,700. Yesterday, it reached new record high above that level, but it closed slightly negative. We were recently saying that Amazon's price action looked pretty bullish. And the stock did break higher! Now we can see some negative technical divergences, along with short-term overbought conditions. However, there have been no confirmed negative signals so far:

Dow Jones Breaks Higher

The Dow Jones Industrial Average broke above its medium-term downward trend line in the first half of May. Then it continued higher above a few-week-long downward trend line. However, it kept bouncing off resistance level of 25,000. In the second half of May blue-chip stocks were relatively weaker than the broad stock market, as Dow Jones fell below 24,500 again. Yesterday, we wrote that "the market is taking an attempt at breaking higher". And it did break up above 25,000 mark. We could see some more upward action here:

The S&P 500 index continued its short-term uptrend yesterday, as it broke above the resistance level of 2,750. Expectations before the opening of today's trading session are virtually flat and we may see profit taking action at some point. But there have been no confirmed negative signals so far.

Concluding, the S&P 500 index will likely open virtually flat today. The market may fluctuate after Wednesday's rally. Will the uptrend reverse? Probably not. However, we may some downward correction. Tech stocks may be relatively weaker on Thursday, as investors rotate into blue-chip stocks.

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