Trading position (short-term; our opinion): No positions are justified from the risk/reward perspective (S&P 500 index).

Intraday outlook: The broad stock market will likely open higher today. Then we may see more short-term fluctuations along the 3,000 level.

The U.S. stock market indexes gained 0.1-0.7% on Monday, retracing some of their Friday's declines, as investors' sentiment improved ahead of the quarterly corporate earnings releases. The S&P 500 index reached the new record high of 3,017.80 on Monday a week ago. It gained around 290 points from its early June local low of 2,728.81. The Dow Jones Industrial Average gained 0.1% and the Nasdaq Composite gained 0.7% yesterday.

The nearest important resistance level of the S&P 500 index remains at 3,000. The next resistance level is at around 3,015-3,020, marked by the record high. On the other hand, the support level is at 2,965-2,970, marked by the early July local lows.

The broad stock market broke above its short-term consolidation recently and it broke above the 3,000 mark. Is this a real bullish breakout above the last year's September-October topping pattern? The S&P 500 continues to trade along the 3,000 level:

Positive Expectations Again

The index futures contracts trade 0.3-0.4% above their Monday's closing prices, so expectations before the opening of today's trading session are positive. The European stock market indexes have gained 0.6-1.5% so far. Investors will wait for some economic data announcements today: Existing Home Sales, Richmond Manufacturing Index at 10:00 a.m. They will also wait for the quarterly corporate earnings releases.

The S&P 500 futures contract trades within an intraday uptrend, as it retraces some more of its Friday's decline this morning. The nearest important resistance level is at 3,000-3,010. On the other hand, the support level is at 2,985-2,990. The futures contract is closer to the 3,000 mark, as we can see on the 15-minute chart:

Nasdaq 100 Also Higher

The technology Nasdaq 100 futures contract follows a similar path, as it trades within an intraday uptrend. It bounced off the 8,000 resistance level on Friday. But it is coming back closer to the resistance level again. The Nasdaq futures contract remains above the two-day-long upward trend line, as the 15-minute chart shows:

Apple the Highest Since Early May

Let's take a look at the Apple, Inc. stock (AAPL) daily chart (chart courtesy of http://stockcharts.com). The stock gets closer to the resistance level of $210-215. It was the highest since the early May yesterday. But will it extend the uptrend ahead of the next Tuesday's quarterly earnings release? There have been no confirmed negative signals so far:

Now let's take a look at the daily chart of Microsoft Corp. stock (MSFT). The stock reached the new record high of $140.67 on Friday, following Thursday's quarterly earnings release. However, it retraced most of the advance on the same day and it got back to the month-long consolidation along the price of $135. Yesterday, it got back slightly higher. The resistance level remains at around $140:

Dow Jones Going Sideways

The Dow Jones Industrial Average reached the new record high of 27,398.68 on Tuesday a week ago. Then it retraced some of the recent rally. For now, it looks like a downward correction. However, we still can see technical overbought conditions:

The S&P 500 index reached the new record high on Monday a week ago. But then it fluctuated, as investors took profits off the table. The index got back below the 3,000 mark again on Friday. For now, it looks like a consolidation. We could see some more sideways trading action, as investors react to the quarterly corporate earnings releases.

Concluding, the S&P 500 index will likely open higher today. We could see more short-term fluctuations along the 3,000 mark.

Trading position (short-term; our opinion): No positions are justified from the risk/reward perspective (S&P 500 index).

On an administrative note, there will be no Stock Trading Alerts since tomorrow, July the 24th up to Friday, July the 26th. They will resume next week on Monday. We apologize for inconvenience.

Thank you.

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