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The S&P 500 extended its last week’s decline yesterday. But the market will likely rebound this morning. So is the correction over?

For in-depth technical analysis of various stocks and a recap of today's Stock Trading Alert we encourage you to watch today's video.

The S&P 500 index lost 1.14% on Monday, as it extended the decline from its last Thursday’s local high of 4,732. Yesterday it fell to the local low of 4,531.10. So it retraced over 200 points since Thursday. Investors were selling off stocks following Wednesday’s FOMC Monetary Policy release. On Dec. 3 the index fell to the local low of 4,495.12 and it was 5.24% below the Nov. 22 record high of 4,743.83. Then we saw another attempt at getting back to the all-time high and more than a week ago on Friday the index closed the highest in history.

Today the broad stock market is expected to open 0.9% higher and we may see some retracement within a short-term downtrend. For now, it looks like an upward correction.

The nearest important resistance level is now at around 4,590-4,600, marked by the yesterday’s daily gap up of 4,587.90-4,600.22. The resistance level is also at 4,620-4,630. On the other hand, the support level is at 4,500-4,550, marked by the early December local lows. The S&P 500 continues to trade within an two-month-long consolidation, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):

Conclusion

The S&P 500 index is expected to open higher this morning and it will retrace some of the recent 200-point decline. We will likely see an intraday consolidation and the market may fluctuate along the 4,600 level.

Here’s the breakdown:

• The S&P 500 broke below the 4,600 level on Monday, as it extended its last week’s decline.
• The market remains within a two-month-long consolidation.
• In our opinion no positions are currently justified from the risk/reward point of view.

Today's premium Stock Trading Alert includes details of our trading position. Interested in more exclusive updates? Join our premium Stock Trading Alerts newsletter and read all the details today.

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Paul Rejczak,
Stock Trading Strategist
Sunshine Profits: Effective Investments through Diligence and Care

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Stocks extended their decline on Friday and the S&P 500 index retraced the whole of its Wednesday’s Fed rally. Is this a new downtrend?

The S&P 500 index lost 1.03% on Friday and it got back below the Wednesday’s daily low. It retraced the whole post-FOMC Wednesday’s advance. On Dec. 3 the index fell to the local low of 4,495.12 and it was 5.24% below the Nov. 22 record high of 4,743.83. Then we saw another attempt at getting back to the all-time high and a week ago on Friday the index closed the highest in history. Then we’ve witnessed another attempt at breaking higher, but since last Thursday the market has been declining again. Today the index is expected to open 1.2% lower but we may see an intraday upward correction at some point

The nearest important resistance level is now at around 4,620-4,630. On the other hand, the support level is at 4,500-4,550, marked by the early December local lows. The S&P 500 continues to trade within a consolidation, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):

Nasdaq 100 Is Below 16,000 Again

Let’s take a look at the Nasdaq 100 chart. The technology index bounced from the resistance level of 16,400 once again last week. Tech stocks remain relatively weaker, as the Nasdaq 100 is closer to the early December local lows than the broad stock market’s gauge.

Apple’s Downward Correction

The recent broad stock market’s rally was driven by a handful of mega-cap stocks. Apple was the main driver of that rally, as it reached the new record high of $182.13 (and the market cap of over $2.9 trillion) on Dec. 13. The stock is trading within a downward correction now, and it’s getting closer to an over month-long upward trend line. The support level is at $165-170.

Conclusion

The S&P 500 index is expected to open much lower this morning following an overnight global markets’ sell-off. We will likely see an intraday consolidation and attempts at retracing some of the decline from Thursday’s local high.

Here’s the breakdown:

• The S&P 500 is expected to open lower but we may see a consolidation or an intraday upward correction at some point.
• In our opinion no positions are currently justified from the risk/reward point of view.

Today's premium Stock Trading Alert includes details of our trading position. Interested in more exclusive updates? Join our premium Stock Trading Alerts newsletter and read all the details today.

Thank you.

Paul Rejczak,
Stock Trading Strategist
Sunshine Profits: Effective Investments through Diligence and Care

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Stocks went lower yesterday, as investors took profits off the table ahead of today’s FOMC release. Was it a reversal or just correction?

For in-depth technical analysis of various stocks and a recap of today's Stock Trading Alert we encourage you to watch today's video.

The S&P 500 index lost 0.75% on Tuesday, as it broke below its recent trading range. The broad stock market’s gauge retraced some of its rally and it got back below the 4,650 level. On the previous Friday the index fell to the local low of 4,495.12 and it was 5.24% below the Nov. 22 record high of 4,743.83. Then we saw another attempt at getting back to the all-time high and on Friday the index closed the highest in history.

So was yesterday’s decline only a correction? For now, it looks like a downward correction, but we may see some more volatility following today’s FOMC release and tomorrow’s ECB and the BOE release. Today the index is expected to open virtually flat and it will likely trade within a consolidation before the Fed release at 2:00 p.m.

The nearest important resistance level is now at 4,665-4,670, marked by the recent local lows and the next resistance level is at 4,700. On the other hand, the support level is at 4,610-4,630, marked by the previous Tuesday’s daily gap up of 4,612.60-4,631.97. The support level is also at 4,600. The S&P 500 is close to the early November local low, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):

Tech Stocks Are Relatively Weaker

Let’s take a look at the Nasdaq 100 chart. The technology index bounced to the resistance level of 16,400. Tech stocks remain relatively weaker, as the Nasdaq 100 is closer to the early December local lows.

Conclusion

The S&P 500 index will likely trade within an intraday consolidation before the Fed release today. Then we may see an increased volatility in stocks, currencies and commodities. The S&P 500 index trades within a downward correction and we may see more profit-taking action in the near term.

Here’s the breakdown:

• The S&P 500 is expected to open virtually flat ahead of today’s FOMC release.
• We are maintaining our short position from the 4,678 level.

Today's premium Stock Trading Alert includes details of our trading position. Interested in more exclusive updates? Join our premium Stock Trading Alerts newsletter and read all the details today.

Thank you.

Paul Rejczak,
Stock Trading Strategist
Sunshine Profits: Effective Investments through Diligence and Care

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