More Uncertainty As Stocks Got Closer To January Record High

The U.S. stock market indexes were mixed between -0.2% and +0.1% on Wednesday, as investors hesitated following the recent advance. The S&P 500 index remains above the level of 2,850 and it currently trades just 0.5% below the January’s 26th record high of 2,872.87. The Dow Jones Industrial Average lost 0.2% and the technology Nasdaq Composite gained 0.1% yesterday.

The nearest important level of support of the S&P 500 index remains at around 2,850, marked by the recent level of resistance. The next level of support is at 2,825-2,835, marked by the recent local lows. The support level is also at around 2,800. On the other hand, the nearest important level of resistance is at 2,870-2,875, marked by the mentioned January’s all-time high. Potential level of resistance is also at 2,900.

The broad stock market got even closer to its January’s record high, as investors’ sentiment improved following quarterly corporate earnings, economic data releases. The S&P 500 index broke above the level of 2,850 on Tuesday following last Thursday’s bounce off 2,800 mark. But will it continue higher? There are still two possible medium-term scenarios – bearish that will lead us towards the February low again, and the bullish one – breakout higher towards 3,000 mark. The latter one is getting more and more real. The S&P 500 index still seems to be “climbing a wall of worries” here:

Short-term Consolidation, Topping Pattern or Just Pause?

Expectations before the opening of today’s trading session are slightly positive, because the index futures contracts trade 0.1% higher vs. their yesterday’s closing prices. The main European stock market indexes have been mixed so far. Investors will wait for some economic data announcements:Producer Price Index, Initial Claims at 8:30 a.m., Wholesale Inventories at 10:00 a.m. The broad stock market may extend its short-term consolidation today. There have been no confirmed negative signals so far. However, there are some short-term overbought conditions and stocks trade slightly below the medium-term resistance level.