The main U.S. stock market indexes were mixed yesterday, as investors reacted hesitantly to the quarterly earnings releases and economic data announcements. However, all three major indexes climbed to new historical highs on Thursday. The S&P500 index gained 0.5%, after reaching a daily high at 1,693.12. The breakout above the May 22 local top is a positive sign, but some short-term uncertainty cannot be excluded here. For now it is only a very small breach in the resistance zone around the level of 1,700 and the market may still choose the medium-term consolidation extension scenario, as we can see on the daily chart:

Expectations before the opening of today’s session are negative, as investors react to yesterday’s worse-than-expected quarterly earnings release from Google Inc. So, at least in the short term, the technology sector enters a correction of its recent uptrend. The “old economy” indexes may behave relatively stronger, although that doesn’t mean they will not correct somewhat. The 15-minute chart of the S&P500 futures contract (CFD) shows a little retreat, however there are no negative signs and the price is still above its short-term support level of 1,665, and above last Wednesday’s after-hours move up:

Thank you,
Paul Rejczak