Stocks Keep Going Higher, But Will They Continue?

Briefly:

Intraday trade: Our yesterday’s intraday trading outlook was neutral. It proved correct because the S&P 500 index gained just 0.1% following slightly lower opening of the trading session. The index may retrace some of its recent rally today after neutral of the trading session. There have been no confirmed negative signals so far. Therefore, we prefer to be out of the market today, avoiding low risk/reward ratio trades.

Our intraday outlook is neutral today. 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 main U.S. stock market indexes gained 0.1% on Wednesday, slightly extending their uptrend, as investors’ sentiment remained bullish. The S&P 500 index has reached new record high at the level of 2,540.53. The Dow Jones Industrial Average reached new record high at the level of 22,685.94, and the technology Nasdaq Composite reached new all-time high at the level of 6,546.46. The nearest important level of resistance of the S&P 500 index is at around 2,540-2,550. On the other hand, the nearest important level of support is at around 2,520, marked by Tuesday’s daily gap up of 2,519.44-2,520.40. The next support level is at 2,510, marked by previous level of resistance and local highs. The support level is also at 2,490, marked by the September 12 daily gap up of 2,488.95-2,490.37, among others. The S&P 500 index accelerated its uptrend recently. We still can see medium-term negative technical divergences, but will they lead to a downward correction?

Short-Term Fluctuations Ahead?

Expectations before the opening of today’s trading session are virtually flat, with index futures currently between 0.0% and +0.05% vs. their Wednesday’s closing prices. The European stock market indexes have been mixed so far. Investors will now wait for some economic data announcements: Initial Claims, Trade Balance at 8:30 a.m., Factory orders number at 10:00 a.m. The market expects that the Initial Claims were at 266,000 last week, and Factory Orders grew 1.0% in August. Investors will also wait for some quarterly corporate earnings releases. The S&P 500 futures contract trades within an intraday consolidation following another daily advance. The nearest important level of resistance is at around 2,535-2,540, marked by new all-time high. On the other hand, support level is at 2,530, marked by short-term consolidation. The next support level remains at 2,520-2,525, marked by recent local lows. The support level is also at around 2,500-2,510. The futures contract trades along its new record highs, as we can see on the 15-minute chart:

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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