The U.S. stock market indexes lost 0.1-0.5% on Friday, as they extended their short-term consolidation. The S&P 500 index gained more than 180 points from its previous week's Monday's local low recently. It is currently 2.3% below its May the 1st record high of 2,954.13. The Dow Jones Industrial Average lost 0.1% and the Nasdaq Composite lost 0.5% on Friday.
The nearest important resistance level of the S&P 500 index
remains at 2,900-2,910. The resistance level is also at 2,930-2,950. On
the other hand, the support level is at 2,875-2,880. The next support
level remains at 2,830-2,850.
The broad stock market broke above the last year's high in the early
May. But then the S&P 500 index retraced all of the April's advance.
The market also broke below its two-month-long upward trend in the
early May. And then it got back higher following breaking above the month-long downward trend line:
More Short-Term Uncertainty
The index futures contracts trade between -0.05% and +0.05% vs. their
Friday's closing prices, so the expectations before the opening of
today's trading session are virtually flat. The European stock market
indexes have been mixed so far. Investors will wait for some economic
data announcements today: Empire State Manufacturing Index, NAHB Housing
Market Index at 10:00 a.m.
The broad stock market will likely further extend its short-term
fluctuations following last week's rally. The S&P 500 index may
fluctuate below the mentioned resistance level of 2,900.
The S&P 500 futures contract
trades within an intraday consolidation following an overnight decline.
The market remains below the resistance level of around 2,890-2,900. On
the other hand, the support level is at 2,865-2,875. The futures
contract remains slightly above its short-term upward trend line, as the 15-minute chart shows:
Nasdaq Still at 7,500
The technology Nasdaq 100 futures contract follows a similar path, as
it trades within an intraday consolidation. The market extended its
rally a week ago, following breaking above the resistance level of
7,250-7,300. Then it broke above the 7,500 mark and entered a short-term
consolidation. It got close to the 7,600 mark on Tuesday, before
reversing downwards. The nearest important resistance level remains at
7,550-7,600. The Nasdaq futures continues to trade along the 7,500 mark this morning, as we can see on the 15-minute chart:
Apple, Microsoft Going Sideways
Let's take a look at the Apple, Inc. stock (AAPL) daily chart (chart courtesy of http://stockcharts.com).
The stock got back to the resistance level of around $200, following
breaking above the downward trend line in the early June. For now, it
looks like an upward correction. However, if the stock gets back above
$200, we could see more buying pressure:
Now let's take a look at the daily chart of Microsoft Corp. (MSFT).
The stock accelerated its uptrend in late April. Since then, the market
was trading within a consolidation. In the early June it broke below the
support level, but then it got back higher. It reached the new record high of $134.24 on Tuesday a week ago, before reversing its intraday uptrend once again:
Dow Jones Remains at 26,000
The Dow Jones Industrial Average
has been relatively weaker than the broad stock market since February.
The resistance level remained at around 26,800-27,000, marked by the
last year's topping pattern and the record high of 26,951.8. Recently
the blue-chip stocks' gauge followed the broad stock market, as it
accelerated the downtrend. The market broke below its important 200-day
moving average, but then it got back higher. For now, it looks like a flat correction within an uptrend:
Nikkei Also Going Sideways
Let's take a look at the Japanese Nikkei 225 index. It retraced some
more of its recent decline last week. However, the market remains close
to the 21,000 mark. The index continues to trade along its previous
local lows:
The S&P 500 index traded within a short-term consolidation last week, as investors took short-term profits off the table
following the early June rally. Will the broad stock market get back to
the record high? There have been no confirmed negative signals so far.
Concluding, the S&P 500 index will likely open virtually
flat today. Then we could see more short-term fluctuations ahead of this
week's important economic data releases.
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Thank you.
Paul Rejczak
Stock Trading Strategist
Sunshine Profits - Effective Investments through Diligence and Care
