The U.S. stock market indexes gained between 0.4% and 1.1% yesterday, as investors neglected Washington’s budget crisis, buying in reaction to some better-than-expected economic data announcements. The S&P 500 index bounced off the support level of around 1,680, marked by the 50% retracement of August-September rally at 1,678.67. For now, it looks like an upward correction of the recent downtrend, however, the trend reversal cannot be excluded, as the technology stocks continue their long-term move up. The nearest important resistance is at 1,700, marked by the previous consolidation, as we can see on the daily chart:

Expectations before the opening of today’s session are negative, as the main European stock market indexes have lost 0.4-0.8% so far. Investors will now wait for the ADP Employment Change report announcement at 8:15 a.m., which is some kind of a leading indicator for Friday’s unemployment data release. The S&P 500 futures contract (CFD) corrected its recent downward move, reaching the resistance at around 1,690. Today, there is some weakness, as the price is back down in the area of 1,675-1,680. The level of support is at around 1,665, marked by yesterday’s low, as the 15-minute chart shows:

Thank you,
Paul Rejczak

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