S&P 500 Fluctuates As Market May Be Topping, Or Not?

Briefly:

Intraday trade: Our Wednesday’s intraday trading outlook was bearish. It proved partly accurate, because the S&P 500 lost 0.1% following slightly lower opening of the trading session (-0.2%). The broad stock market fluctuates after its record-setting rally. There have been no confirmed negative signals so far. However, we can see some clear short-term overbought conditions along with an overly bullish investors’ sentiment. Therefore, intraday short position is favored again. Stop-loss is at the level of 2,765 and potential profit target is at 2,710 (S&P 500 index).

Our intraday outlook is bearish today. Our short-term outlook is neutral, and our medium-term outlook is neutral:

Intraday outlook (next 24 hours): bearish
Short-term outlook (next 1-2 weeks): neutral
Medium-term outlook (next 1-3 months): neutral

The main U.S. stock market indexes lost 0.1% on Wednesday, as stocks fluctuated following their week-long record setting rally. The S&P 500 index retraced some of its recent move up, before bouncing off support level and closing virtually flat. The Dow Jones Industrial Average remained relatively close to its Tuesday’s new record high of 25,439.78, and the technology Nasdaq Composite traded above 7,100 mark. The nearest important level of support of the S&P 500 index is at around 2,735-2,740, marked by recent fluctuations. The next support level is at 2,730, marked by Friday’s daily low. The support level is also at 2,715-2,720, marked by last Thursday’s daily gap up of 2,714.37-2,719.07. On the other hand, potential resistance level is at 2,760, marked by new all-time high. There have been no confirmed negative signals so far. However, we still can see medium-term technical overbought conditions along with negative technical divergences:

Mixed Expectations

Expectations before the opening of today’s trading session are virtually flat, with index futures currently up 0.1% vs. their Wednesday’s closing prices. The 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. The market expects that Producer Prices grew 0.2% in December. The S&P 500 futures contract trades within an intraday consolidation, following yesterday’s rebound. The nearest important level of resistance is at around 2,760, marked by record high. On the other hand, support level is at 2,735-2,740, marked by yesterday’s daily lows. The futures contract remains close to its record high, as we can see on the 15-minute chart: