The U.S. stock market indexes were mixed between 0.0% and +0.1% on Friday, as investors sentiment remained basically unchanged following some economic data announcements along with the third quarter's ending. The S&P 500 index has reached the new record high of 2,940.91 more than a week ago on September the 21st. It currently trades 0.9% below that high. The Dow Jones Industrial Average gained 0.1% and the technology Nasdaq Composite gained 0.05% on Friday.
The nearest important level of support of the S&P 500 index remains at 2,900. The support level is also at 2,885-2,890, marked by the recent local lows. On the other hand, the nearest important level of resistance remains at around 2,920-2,930, marked by last week's Monday's daily gap down of 2,923.79-2,927.11. The resistance level is also at 2,940, marked by the record high.
The broad stock market reached the new record high recently, as the S&P 500 index extended its short-term uptrend above the level of 2,900. Will it continue higher despite some short-term technical overbought conditions? The index is at its three-month-long upward trend line following last Wednesday's intraday reversal, as we can see on the daily chart:
Positive Expectations, but Will Uptrend Continue?
The index futures contracts are trading 0.6-0.7% above their Friday's closing prices this morning. So expectations before the opening of today's trading session are positive. The main European stock market indexes have gained 0.2-0.6% so far. Investors will wait for some economic data announcements today: ISM Manufacturing PMI, Construction Spending at 8:30 a.m. The broad stock market will likely take an attempt at extending its medium-term uptrend today. But will it break above the mentioned September's record high? It's hard to say. If it breaks higher, we could see more buying pressure. There have been no confirmed negative signals so far.
The S&P 500 futures contract trades within an intraday consolidation following its overnight advance. The nearest important level of resistance is at around 2,940-2,945, marked by the record high. On the other hand, the support level is at 2,925-2,930, marked by the previous level of resistance. The support level is also at 2,905-2,915, among others. The futures contract is at its recent local high, as the 15-minute chart shows:
Nasdaq at New Record High
The technology Nasdaq 100 futures contract follows a similar path, as it trades higher this morning. The tech stocks' gauge broke above the level of 7,700, and it reached the new record high. The nearest important support level is now at 7,650-7,670, marked by the recent resistance level. The support level is also at 7,600-7,620. The Nasdaq futures contract trades above its short-term upward trend line, as we can see on the 15-minute chart:
Big Cap Tech Stocks Closer to Their Resistance Levels
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 September the 5th, before reversing lower. Then it broke below its month-long upward trend line. The resistance level remains at $225-230. On the other hand, the support level is at $215:
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 in the early September. Since then it was retracing its record-breaking rally. The stock broke below the month-long upward trend line but it bounced off its medium-term upward trend line, and now it is above the price of $2,000 again:
Dow Jones Still at the Trend Line
The Dow Jones Industrial Average reached the new all-time high at the level of 26,769.16 recently. Since then it was retracing that advance. It broke below the support of around 26,500 on Wednesday, but it continued to trade above the upward trend line:
The S&P 500 index retraced some of its last week's record-breaking advance recently, as investors reacted to the last week's Wednesday's Fed's interest rate hike. For now, it looks like some relatively flat correction within a medium-term uptrend, because the index continues to trade above its upward trend line.
Concluding, the S&P 500 index will probably open higher today. We may see an attempt at reaching the new record high, because the market trades just 0.9% below its September the 21st high of 2,940.91. There have been no confirmed medium-term negative signals so far.
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Paul Rejczak
Stock Trading Strategist
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