Trading position (short-term; our opinion): Short position with the downside target of 2,840 (S&P 500 index) remains justified from the risk/reward perspective. However, the outlook may change if the index breaks above the resistance level of 2,980-3,000.

Intraday outlook: The broad stock market will likely open slightly higher today. We may see a consolidation following the recent rally.

The U.S. stock market indexes were mixed between -0.1% and +0.9% on Thursday, following the recent record-breaking advance. The investors' sentiment improved ahead of quarterly earnings releases, among other factors. The S&P 500 index reached the new record high of 3,002.98 on Wednesday. It gained more than 270 points from its early June local low of around 2,729. The Dow Jones Industrial Average gained 0.9% and the Nasdaq Composite lost 0.1% on Thursday.

The nearest important resistance level of the S&P 500 index remains at around 3,000. On the other hand, the support level is at 2,985, marked by the Wednesday's daily gap up of 2.981.90-2,984.62. The support level is also 2,975, marked by the previous Wednesday's daily gap up of 2,973.21-2,977.96.

The broad stock market broke above its short-term consolidation on Wednesday a week ago and it got to the 3,000 mark. Is this a real bullish breakout above the last year's September-October topping pattern? The market remains relatively close to the previous medium-term highs:

Positive Expectations Again

The index futures contracts trade 0.2-0.3% higher vs. their Thursday's closing prices, so expectations before the opening of today's trading session are slightly positive. The European stock market indexes have gained 0.2-0.4% so far. Investors will wait for the Producer Price Index release at 8:30 a.m.

The S&P 500 futures contract trades within an intraday consolidation, as it remains close to its new record high. The nearest important support level is now at 3,000-3,005. The futures contract is above the 3,000 mark, as we can see on the 15-minute chart:

Nasdaq Also Close to Record High

The technology Nasdaq 100 futures contract follows a similar path, as it trades within an intraday consolidation. The market got closer to the 8,000 mark and it reached the new record high yesterday. The support level is now at 7,850-7,900. The Nasdaq futures contract remains close to the short-term upward trend line, as the 15-minute chart shows:

Amazon Backs Off New Local High

Let's take a look at the Apple, Inc. stock (AAPL) daily chart (chart courtesy of http://stockcharts.com). The stock broke slightly above the resistance level of $200 a week ago. Then we saw a short-term consolidation, as the market fluctuated below the early May local highs. The resistance level remains at $210-215, and the support level is at $195-200:

Now let's take a look at the daily chart of Amazon.com, Inc. stock (AMZN). The stock broke above its early May local high on Tuesday and it got closer to the price of $2,000. On Wednesday it accelerated higher. There is another resistance level of around $2,050, marked by the last year's record high of $2,050.50. On the other hand, the support level is now at $1,970-2,000:

Dow Jones Breaks Above 27,000

The Dow Jones Industrial Average reached the new record high of 27,088.45 yesterday. There have been no confirmed negative signals so far. However, we still can see some short-term overbought conditions:

The S&P 500 index reached the new record high on Wednesday, as investors' sentiment remained bullish following the recent advances. But will the uptrend continue? We may see some more short-term uncertainty following the record-breaking advance.

Concluding, the S&P 500 index will likely open slightly higher today. Then we may see another short-term profit-taking action. Investors will wait for the coming quarterly earnings releases.

Trading position (short-term; our opinion): Short position with the downside target of 2,840 (S&P 500 index) remains justified from the risk/reward perspective. However, the outlook may change if the index breaks above the resistance level of 2,980-3,000.

Thank you.

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