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 lower today. We may see more profit-taking action following the recent advances.

The U.S. stock market indexes were mixed between -0.1% and +0.5% on Tuesday, as they extended their short-term consolidation following last week's advance. The S&P 500 index reached the new record high of 2,995.84 on Wednesday. The index gained almost 270 points from its early June local low of around 2,729. But then it retraced some of the rally, as it fell more than 30 points off the high. The Dow Jones Industrial Average lost 0.1% and the Nasdaq Composite gained 0.5% on Tuesday.

The nearest important resistance level of the S&P 500 index remains at around 2,990-3,000. On the other hand, the support level is at 2,975, marked by the Wednesday's daily gap up of 2,973.21-2,977.96. The support level is also at 2,945-2,955, marked by last Monday's daily gap up of 2,943.98-2,952.22.

The broad stock market broke above its short-term consolidation on Wednesday a week ago and it got very close 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:

More Short-Term Fluctuations

The index futures contracts trade 0.2-0.3% below their Tuesday's closing prices, so expectations before the opening of today's trading session are slightly negative. The European stock market indexes have lost 0.1-0.5% so far. Investors will wait for some economic data announcements today: Wholesale Inventories at 10:00 a.m., Crude Oil Inventories at 10:30 a.m. There will also be the Fed Chair Powell Testimony at 10:00 a.m.

The S&P 500 futures contract trades within an intraday downtrend, as it retraces its yesterday's intraday advance. The nearest important resistance level is at 2,980-2,985, marked by the short-term local high. On the other hand, the support level is at 2,960-2,965. The futures contract extends its short-term consolidation, as we can see on the 15-minute chart:

Nasdaq Relatively Stronger

The technology Nasdaq 100 futures contract follows a similar path, as it retraces some of yesterday's advance. The nearest important resistance level is now at 7,850-7,900. On the other hand, the support level is at 7,800. The Nasdaq futures contract remains slightly above the 7,800 mark this morning, as the 15-minute chart shows:

Amazon Breaks Higher, Apple Goes Sideways

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 $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 yesterday and it got closer to the price of $2,000. There is a resistance level of around $2,050, marked by last year's record high of $2,050.50. On the other hand, the support level is at $1,950-1,965:

Dow Jones Slightly Below Last Week's New Record

The Dow Jones Industrial Average reached the new record high of 26,966.00 a week ago, as it broke slightly above its last year's topping pattern and the previous record high of 26,951.8. The blue-chip stocks gauge remains close to the 27,000 mark. There have been no confirmed negative signals so far. However, we can see some short-term overbought conditions:

The S&P 500 index reached the new record high on Wednesday a week ago, as investors' sentiment improved ahead of Friday's monthly jobs data release and the long holiday weekend. Will the uptrend continue? We may see some more short-term uncertainty following the record-breaking advance. For now, it looks like another relatively flat correction within an uptrend.

Concluding, the S&P 500 index will likely open slightly lower today. Then we may see more uncertainty following last week's Wednesday's rally. Investors will wait for the Fed Chair Powell Testimony at 10:00 a.m.

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