Stocks Get Closer To June Record High…Will Uptrend Continue?

July 13, 2017

Our intraday outlook is bearish, and our short-term outlook is bearish. Our medium-term outlook remains neutral, following S&P 500 index breakout above last year's all-time high:

Intraday outlook (next 24 hours): bearish

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

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

Long-term outlook (next year): neutral

The main U.S. stock market indexes gained between 0.6% and 1.1% on Wednesday, breaking above their recent trading range, as investors' sentiment improved following economic data releases, Fed's Janet Yellen's Congressional Testimony. The S&P 500 index got close to its June 19 all-time high of 2,453.82. It trades just 0.4% below that record high. Stocks have rebounded following their early July move down. The Dow Jones Industrial Average was relatively weaker than the broad stock market yesterday, as it gained 0.6%. However, it reached new record high at the level of 21,580.8. The technology Nasdaq Composite was relatively stronger again, as it gained 1.1%. It has retraced more of its recent move down. The nearest important support level of the S&P 500 index is at around 2,430-2,435, marked by yesterday's daily gap up of 2,429.30-2,435.75. The next support level remains at 2,400-2,410, marked by the May 25 daily gap up of 2,405.58-2,408.01, among others. On the other hand, level of resistance is at 2,450-2,455, marked by all-time high. There have been no confirmed negative signals so far. However, we can see overbought conditions and negative technical divergences. The S&P 500 index is trading within its over month-long consolidation, as we can see on the daily chart:

Closer To Record High

Expectations before the opening of today's trading session are positive, with index futures currently up 0.1-0.3% vs. their Wednesday's closing prices. The European stock market indexes have gained 0.1-0.6% so far. Investors will now wait for some economic data announcements: Initial Claims, Producer Price Index at 8:30 a.m. The market expects that Initial Claims were at 245,000 last week, and Producer Price Index fell 0.1% in June. The S&P 500 futures contract trades within an intraday consolidation, following an overnight move up. The market continued its yesterday's rally. The nearest important level of resistance is at around 2,445-2,450, marked by record high. On the other hand, support level is at 2,440, and the next support level is at 2,420-2,430, marked by recent consolidation. Will the market continue towards new all-time highs? Or is this some topping pattern before downward reversal?

Techs March Higher

The technology Nasdaq 100 futures follows a similar path, as it trades within an intraday consolidation. The Nasdaq extends its short-term uptrend. The nearest important level of resistance is at around 5,850, marked by previous local high. On the other hand, support level is at 5,750-5,800, and the next level of support remains at 5,700-5,720, as the 15-minute chart shows:

Concluding, the S&P 500 index broke above its recent trading range yesterday, as investors' sentiment improved. Will uptrend continue towards new record highs? Or is this some topping pattern within an over-month long consolidation? There have been no confirmed negative signals so far. However, we still can see negative technical divergences, along with some medium-term overbought conditions.

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Stock Trading Strategist

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Disclaimer

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.

Paul Rejczak is a stock market strategist, who has been known for quality of his technical and fundamental analysis since the late nineties. He is interested in forecasting market behavior based on both traditional and innovative methods of technical analysis. Paul has made his name by developing mechanical trading systems. Paul is the author of Sunshine Profits’ premium service for stock traders: Stock Trading Alerts.

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