Stocks Bouncing, But Will They Resume The Uptrend?

The U.S. stock market indexes were mixed between -0.3% and +0.1% on Friday, as investors hesitated following the Thursday's decline. The S&P 500 index broke above its short-term consolidation two weeks ago and it continued higher. The market got above the 61.8% Fibonacci retracement of its October-December downward correction of 20.2% (2,713.88), but then it retraced some of the advance. The Dow Jones Industrial Average lost 0.3% and the Nasdaq Composite gained 0.1% on Friday.

The nearest important resistance level of the S&P 500 index is at 2,720-2,725, marked by Thursday's daily gap down of 2,719.32-2,724.15. The resistance level is also at 2,740, marked by the local high. On the other hand, the support level is at 2,700-2,710, marked by the previous resistance level. The support level is also at 2,650.

The broad stock market broke below its two-month-long trading range in the mid-December, as the S&P 500 index fell below the level of 2,600. Then the market accelerated lower and it broke below the 2,400 mark. Since then, it has retraced more than 61.8% of the whole decline off the September high. The index got closer to its October-November local highs and the resistance level of 2,800 recently, as we can see on the daily chart:

Daily S&P 500 index chart - SPX, Large Cap Index

Positive Expectations, but Will the Rebound Continue?

Expectations before the opening of today's trading session are positive because the index futures contracts trade 0.3-0.4% above their Friday's closing prices. The European stock market indexes have gained 0.5-0.8% so far. There will be no new important economic data announcements today. The broad stock market will likely continue to fluctuate following last Thursday's downward correction.

The S&P 500 futures contract trades within an intraday uptrend, as it retraces some of its recent decline. The nearest important resistance level is at around 2,725-2,735, marked by last week's topping consolidation. On the other hand, the support level is at 2,695-2,700, among others. The futures contract accelerated its short-term uptrend this morning, as the 15-minute chart shows:

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Disclosure: None.

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