The main U.S. stock market indexes gained between 0.6% and 0.8% yesterday, bouncing off recent lows, as investors hoped for the end of a downward correction. The S&P 500 index remains above the important support of 1,770-1,775, marked by the October-November consolidation, followed by some local lows. On the other hand, the resistance is at 1,800, and the next resistance is at 1,810-1,815, marked by the November 29 all-time high of 1,813.55. For now, it looks like a correction within a short-term downtrend, however a bullish scenario cannot be excluded as we approach holiday season:

Expectations before the opening of today’s session are virtually flat, with index futures currently down 0.1%. The European stock market indexes have lost 0.5-1.0% so far. Investors will now wait for the economic data announcements: Consumer Price Index and Current Account Balance at 8:30 a.m. The S&P 500 futures contract (CFD) trades in a relatively narrow range, just below the nearest important resistance at 1,780-1,785. Will the rebound continue? There is a potential positive four-session long reversed head and shoulders pattern forming, as we can see on the 15-minute chart:

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

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

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Thank you,
Paul Rejczak