Stocks Breaking Higher?

The U.S. stock market indexes gained between 0.4% and 0.8% on Friday, as investors' sentiment improved once again. The S&P 500 index retraced more of its October-December downward correction of 20.2% a week ago on Monday. Then it fluctuated close to the previous local highs along the 2,800 level. The Dow Jones Industrial Average gained 0.4% and the Nasdaq Composite gained 0.8% on Friday.

The nearest important resistance level of the S&P 500 index remains at around 2,800-2,820, marked by the previous medium-term local highs. On the other hand, the support level is at around 2,765-2,780, marked by the recent local lows. The support level is also at the previous daily gap up of 2,757.90-2,760.24.

The broad stock market retraced all of its December sell-off and it got close to the medium-term resistance level of around 2,800, marked by the October-November local highs. So is it still just a correction or a new medium-term uptrend? The market broke above the 61.8% Fibonacci retracement of the 20% decline. And we may see an attempt at getting back to the record highs. But will the index break above the mentioned previous local highs? There have been no confirmed negative signals so far:

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

 

Positive Expectations Again

Expectations before the opening of today's trading session are positive, because the index futures contracts trade 0.4-0.8% above their Friday's closing prices. The European stock market indexes have gained 0.3-0.8% so far. There will be no new important economic data announcements today. The broad stock market will likely extend its short-term uptrend. However, we may see some short-term uncertainty as the market remains close to the mentioned medium-term local highs.

The S&P 500 futures contract trades within an intraday consolidation following an overnight advance. The nearest important level of resistance is at around 2,815-2,820. On the other hand, the support level is at 2,795-2,800. The futures contract is now above the 2,800 mark, as the 15-minute chart shows:

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Disclosure: None.

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