Briefly:

Intraday trade: The S&P 500 index lost 0.1% on Tuesday, after opening 0.1% higher. The broad stock market will probably open slightly higher today. We may see more short-term uncertainty, as the index continues to trade above the support level of its late August high. We prefer to be out of the market, avoiding low risk/reward ratio trades.

Trading position (short-term; our opinion): no short-term positions are justified from the risk/reward perspective.

Our intraday outlook is neutral. Our short-term outlook is neutral, and our medium-term outlook is neutral:

Intraday outlook (next 24 hours): neutral
Short-term outlook (next 1-2 weeks): neutral
Medium-term outlook (next 1-3 months): neutral

The U.S. stock market indexes were mixed between -0.3% and +0.2% on Tuesday, extending their short-term consolidation, as investors continued to hesitate following Monday's retreat. The S&P 500 index has reached the new record high of 2,940.91 on Friday. It currently trades 0.8% bellow that high. The Dow Jones Industrial Average lost 0.3% and the technology Nasdaq Composite gained 0.2% yesterday.

The nearest important level of support of the S&P 500 index remains at 2,915-2,920, marked by the last Thursday's daily gap up of 2,912.36-2,919.73 and the late August local high. The next support level is 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 is now at around 2,925, marked by 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 on Friday, 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 continues to trade above its three-month-long upward trend line, as we can see on the daily chart:

Positive Expectations Again

Expectations before the opening of today's trading session are slightly positive, because the index futures contracts trade 0.2-0.3% above their yesterday's closing prices. The European stock market indexes have been mixed so far. Investors will wait for some economic data announcements today: New Home Sales at 10:00 a.m., Crude Oil Inventories at 10:30 a.m., the FOMC Rate Decision at 2:00 p.m. The broad stock market will likely extend its short-term fluctuations in the morning. Then we may see a reaction to the mentioned FOMC's Statement release. The index remains above its late August local high. If it breaks lower, we could see more selling pressure. For now, it looks like a correction within an uptrend.

The S&P 500 futures contract trades within an intraday consolidation, as it fluctuates following its overnight advance. The nearest important level of resistance remains at around 2,930-2,935, marked by the previous support level. The next resistance level is at 2,940-2,945, marked by the record high. On the other hand, the support level is at 2,915-2,925, marked by the recent fluctuations. The futures contract extends its short-term consolidation, as the 15-minute chart shows:

Nasdaq Above 7,600 Again

The technology Nasdaq 100 futures contract follows a similar path, as it fluctuates following its short-term advance and a breakout above the level of 7,600. It seems that tech stocks are relatively stronger than the broad stock market right now. The nearest important level of resistance is at around 7,650-7,700, marked by the topping pattern along the record high. On the other hand, the support level is now at 7,550-7,600, among others. The Nasdaq futures contract trades close to its Friday's local high, as we can see on the 15-minute chart:

Apple, Amazon - Upward Reversal or Just Bounce?

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 and now it is bouncing off its medium-term upward trend line:

Dow Jones - Short-Term Downward Correction

The Dow Jones Industrial Average extended its uptrend on Friday, as it reached the new all-time high at the level of 26,769.16. The nearest important level of support is at around 26,500, marked by the recent resistance level. The index continues to trade above its medium-term upward trend lines:

The S&P 500 index reached the new record high on Friday following the recent breakout above the late August local high of around 2,917. The broad stock market extended its over nine-year-long bull market, but will it continue much higher? Monday's decline will likely lead to some short-term consolidation.

Concluding, the S&P 500 index will probably open slightly higher today. Then we may see some uncertainty ahead of the FOMC' Statement release at 2:00 p.m. There have been no confirmed negative signals so far.

Intraday trade:

No intraday position is justified from the risk/reward perspective today.

Trading position (short-term; our opinion): no short-term positions are justified from the risk/reward perspective.

Thank you.

Paul Rejczak
Stock Trading Strategist
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