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S&P 500 Slightly Above 2,500, Will Uptrend Accelerate?

Stock Trading Alert


September 18, 2017 ( Newswire) Intraday trade: Our Friday's neutral intraday outlook has proved partly accurate. The S&P 500 index slightly extended its uptrend, however, it traded within a relatively narrow intraday trading range. The market may retrace some of its recent rally today, as the S&P 500 index is at potential resistance level of 2,500. On the other hand, support level is relatively close, at last week's Tuesday's daily gap up of 2,488.95-2,490.37. Therefore, we still prefer to be out of the market, avoiding low risk/reward ratio trades.

Our intraday outlook remains neutral, and our short-term outlook is bearish, as we expect downward correction. Our medium-term outlook remains bearish:

Intraday outlook (next 24 hours): neutral

Short-term outlook (next 1-2 weeks): bearish

Medium-term outlook (next 1-3 months): bearish

The U.S. stock market indexes gained between 0.2% and 0.3% on Friday, extending their short-term uptrend, as investors' sentiment improved following economic data releases, among others. The S&P 500 index has reached new all-time high at the level of 2,500.23, around 2 points above its last Wednesday's high and almost 10 points above its previous August 8 high of 2,490.87. The Dow Jones Industrial Average has also extended its long-term uptrend. It reached new record high at the level of 22,275.02. The technology Nasdaq Composite index reached new all-time high at 6,464.27. However, it closed within its short-term consolidation along the level of 6,450. The nearest important level of resistance of the S&P 500 index is at 2,500. The next potential resistance level is at around 5,010-5,020. On the other hand, support level is at 2,490, marked by last week's Tuesday's daily gap up of 2,488.95-2,490.37. The next support level remains at around 2,465-2,475, marked by last Monday's daily gap up of 2,467.11-2,474.52. The level of support is also at 2,460, marked by previous short-term consolidation. The S&P 500 index resumed its long-term uptrend, as it reached new record high at around 2,500. Will uptrend continue? Or is this a medium-term topping pattern ahead of downward correction? There have been no confirmed negative signals so far. However, we still can see medium-term overbought conditions accompanied by negative technical divergences:

New Record Highs?

Expectations before the opening of today's trading session are positive, with index futures currently up between 0.2% and 0.3% vs. Friday's closing prices. The European stock market indexes have gained 0.3-0.5% so far. Investors will now wait for the NAHB Housing Market Index release at 10:00 a.m. The market expects that it was at 67 in September. The S&P 500 futures contract trades within an intraday consolidation following overnight move up. The nearest important resistance level is at around 2,505, marked by new record high. On the other hand, level of support is at 2,500, marked by previous resistance level. The next support level is at 2,480-2,485, marked by short-term consolidation. The support level is also at 2,465-2,470, among others. The futures contract trades above its recent consolidation, as we can see on the 15-minute chart:

Tech Sector Also Higher

The technology Nasdaq 100 futures contract follows a similar path, as it trades within an intraday consolidation after overnight move up. It currently trades slightly below Friday's daily high. It is relatively weaker than the broad stock market after bouncing off resistance level at around 6,020, marked by record high. The nearest important level of support is now at 5,990, marked by short-term local low. The next level of support remains at 5,920-5,950, marked by some previous fluctuations. The Nasdaq futures contract trades along its resistance level, as the 15-minute chart shows:

Let's take a look at Apple, Inc. stock (AAPL) daily chart (chart courtesy of It remains below previously broken upward trend line or a rising wedge pattern. The Apple stock has weighting of around 4.0% in the S&P 500 index. We still can see some relative weakness vs. the broad stock market index here:

Now, let's take a look at the blue-chip Dow Jones Industrial Average daily chart (chart courtesy of The index extends its uptrend, as it reaches new record highs. However, we can see some negative technical divergences. Will it continue even higher despite short-term sell signals?

Concluding, the S&P 500 index reached new record high on Friday, as it closed slightly above 2,500 mark. Will the bull market extend even further? There have been no confirmed short-term negative signals so far. However, we still can see some medium-term overbought conditions along with negative technical divergences. The S&P 500 index gained around 4.1% since reaching its March 1 local local high of 2,400.98 (over six months ago). Will this uptrend accelerate or reverse?

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Thank you.

Paul Rejczak
Stock Trading Strategist

Stock Trading Alerts


All essays, research and information found above represent analyses and opinions of Paul Rejczak and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Paul Rejczak and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Rejczak is not a Registered Securities Advisor. By reading Paul Rejczak’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

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