Stocks Reach New Records, But Is There Any Room Left?

July 11, 2019

The S&P 500 index has reached new record high above the 3,000 mark on Wednesday, before closing slightly below the last week’s local high. Will the uptrend continue? Or is this some topping pattern ahead of a downward reversal?

The U.S. stock market indexes gained 0.3-0.8% on Wednesday, slightly extending their uptrend, as investors’ sentiment improved ahead of quarterly earnings releases, among other factors. The S&P 500 index reached the new record high of 3,002.98 yesterday. It gained more than 270 points from its early June local low of around 2,729. The Dow Jones Industrial Average gained 0.3% and the Nasdaq Composite gained 0.8% on Wednesday.

The nearest important resistance level of the S&P 500 index remains at around 3,000. On the other hand, the support level is at 2,985, marked by the yesterday’s daily gap up of 2.981.90-2,984.62. The support level is also 2,975, marked by the previous Wednesday’s daily gap up of 2,973.21-2,977.96.

The broad stock market broke above its short-term consolidation on Wednesday a week ago and it got to the 3,000 mark. Is this a real bullish breakout above the last year’s September-October topping pattern? The market remains relatively close to the previous medium-term highs:

Positive Expectations, Will Uptrend Continue?

The index futures contracts trade 0.3% above their Wednesday’s closing prices, so expectations before the opening of today’s trading session are slightly positive. The European stock market indexes have been mixed so far. Investors will wait for some economic data announcements today: Consumer Price Index, Unemployment Claims at 8:30 a.m., There will also be another Fed Chair Powell Testimony at 10:00 a.m.

The S&P 500 futures cntract trades within an intraday consolidation, as it remains close to the new record high. The nearest important resistance level is at around 3,005. On the other hand, the support level is at 2,985-2,990, among others. The futures contract trades along the last week’s high, as the 15-minute chart shows:

Nasdaq Closer to 8,000

The technology Nasdaq 100 futures contract follows a similar path, as it trades within an intraday consolidation. The market got closer to the 8,000 mark and it reached the new record high this morning. The support level is now at 7,850-7,900. The Nasdaq futures contract trades along the 7,950 level, as we can see on the 15-minute chart:

Amazon Keeps Rallying

Let's take a look at the Apple, Inc. stock (AAPL) daily chart (chart courtesy of http://stockcharts.com). The stock broke slightly above the resistance level of $200 a week ago. Then we saw a short-term consolidation, as the market fluctuated below the early May local highs. The resistance level remains at $210-215, and the support level is at $195-200:

Now let's take a look at the daily chart of Amazon.com, Inc. stock (AMZN). The stock broke above its early May local high on Tuesday and it got closer to the price of $2,000. Yesterday it accelerated higher. There is another resistance level of around $2,050, marked by the last year’s record high of $2,050.50. On the other hand, the support level is now at $1,970-2,000:

Dow Jones Reaches New Record

The DJIA Index reached the new record high of 26,983.45 yesterday. But then it retraced most of the intraday advance before closing just 0.3% higher. The blue-chip stocks gauge remains close to the 27,000 mark. There have been no confirmed negative signals so far. However, we can see some short-term overbought conditions:

Nikkei at the Trend Line

Let's take a look at the Japanese Nikkei 225 Index. It continues to trade within a short-term consolidation. The market remains close to its over month-long upward trend line, and the resistance level is still at around 21,800-22,000:

The S&P 500 index reached the new record high yesterday, as investors’ sentiment remained bullish following the recent advances. But will the uptrend continue? We may see some more short-term uncertainty following the record-breaking advance.

Concluding, the S&P 500 index will likely open slightly higher today. Then we may see some short-term profit-taking action. Investors will wait for another Fed Chair Powell Testimony at 10:00 a.m.

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Paul Rejczak

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.

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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.

The symbol for silver ‘AG’ comes from the Latin word ‘agentum’ meaning silver.