More Volatility And Profit Taking But Still No Fear

The main U.S. stock market indexes were mixed between -0.6% and +0.2% on Wednesday, as investors took some short-term profits off the table following recent record-breaking rally. The S&P 500 index has reached yet another new all-time high at the level of 2,852.97, before closing virtually flat (-0.1%). The Dow Jones Industrial Average has also reached new record high at the level of 26,392.80. It was relatively stronger than the broad stock market, as it gained 0.2%. The technology Nasdaq Composite was relatively weak, as it gained 0.6%. However, it has also reached new all-time high at 7,486.32 yesterday. The nearest important level of support of the S&P 500 index is at around 2,825-2,830, marked by recent local lows. The next support level is at 2,800-2,810, marked by previous resistance level. The support level is also at around 2,780, marked by local lows. The support level is the price level, at which the buying interest is strong enough to overcome selling pressure and push the price higher. Support usually refers to the previous low or lows, lines that are created by drawing the line between previous important bottoms or important tops and then extrapolating this line into the future. We still can see medium-term technical overbought conditions. However, the market continues its nine-year-long bull market:

Positive Expectations

Expectations before the opening of today’s trading session are positive, because index futures trade 0.2-0.5% higher vs. their yesterday’s closing prices. The European stock market indexes have been mixed so far. Investors will wait for some economic data announcements: Initial Claims, Trade Balance at 8:30 a.m., New Home Sales, Leading Indicators at 10:00 a.m. The market expects that New Home Sales were at 679,000 in December. The S&P 500 futures contract trades within an intraday uptrend, as it retraces most of its yesterday’s move down. The market gets closer to its record high again. The nearest important level of resistance is at around 2,850-2,855, marked by that record high. On the other hand, support level is at 2,835-2,840, marked by short-term consolidation. The next level of support remains at 2,825-2,830, marked by yesterday’s daily low. The futures contract trades within a short-term consolidation along the level of 2,840, as we can see on the 15-minute chart: