The U.S. stock market indexes retreated slightly yesterday amid some fears of Fed actions and worse-than-expected Coca-Cola earnings release. Investors wait for the testimony from the Fed’s Chairman Ben Bernanke on Capitol Hill tonight, as it may shake the global markets again. The S&P500 index lost 0.4%, retreating from the May 22 all-time high resistance level at 1,687.18. The market seems to be at a crucial make-or-break moment now. So, the above-mentioned Fed speech may affect the situation significantly, favoring one of the two selected scenarios – continuation of the uptrend or the medium-term consolidation extension, as the daily chart shows:

The S&P500 futures contract (CFD) broke below one of the two recent upward trend lines. The resistance is at around 1,675-1,680 and the nearest support level is at 1,660, marked by the recent short-term fluctuations range. The price is still above last Wednesday’s after-hours quick move up, as we can see on the 15-minute chart:

Expectations before the opening of today’s session are slightly negative, as the anticipation of Ben Bernanke’s testimony brings uncertainty. The main European stock markets have lost 0.5% by now. The markets will also wait for the U.S. economic data announcements today: Housing Starts and Building Permits at 7:30 a.m., Fed’s Beige Book economic report at 2 p.m.

Thank you,
Paul Rejczak