The U.S. stock market indexes gained 1.2-2.3% on Friday, retracing some of their recent decline, as investors’ sentiment improved. The S&P 500 index continues to trade above its long-term upward trend line. It is currently 5.9% below September the 21st record high of 2,940.91. The Dow Jones Industrial Average gained 1.2% and the Nasdaq Composite gained 2.3% on Friday.
The nearest important level of resistance of the S&P 500 index is now at around 2,770, marked by the recent level of support and Friday’s local high. The resistance level is also at 2,800. On the other hand, the level of support is now at 2,700-2,730, marked by the recent local lows and the long-term upward trend line. The support level is also at 2,630-2,650.
The broad stock market continued retracing its medium-term advance last week, as it got closer to 2,700 mark. Then they bounced on Friday, retracing some of their Thursday’s decline. If the index breaks above the resistance level of around 2,800, we could see more buying pressure. But for now it looks like a relatively small upward correction within a downtrend:
Short-term Fluctuations
The index futures contracts trade 0.4-0.9% below their Friday’s closing prices. So expectations before the opening of today’s trading session are negative. The European stock market indexes have been mixed so far. Investors will wait for some economic data announcements today: Retail Sales, Empire State Manufacturing number at 8:30 a.m., Business Inventories at 10:00 a.m. The broad stock market will probably retrace some of its Friday’s advance this morning. But will the downtrend continue below Thursday’s intraday low today? Probably not. We could see some more volatile fluctuations following the recent sell-off. We still can see some short-term oversold conditions.
The S&P 500 futures contract trades within an intraday consolidation. The nearest important level of resistance is at around 2,770-2,800, marked by the short-term local highs. The resistance level is also at 2,820-2,830. On the other hand, the support level is at 2,730-2,740, marked by the local lows. The next level of support is at 2,700-2,720. The futures contract remains close to 2,750 mark, as we can see on the 15-minute chart:
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