Stocks Closer To Medium-Term Resistance Level

The U.S. stock market indexes were mixed between 0.0% and +0.2% on Wednesday, as investors sentiment remained bullish despite some clear short-term technical overbought conditions. The S&P 500 index retraced more of its October-December downward correction of 20.2% (2,713.88) recently. It got closer to the previous local highs along the 2,800 level. The Dow Jones Industrial Average gained 0.2% and the Nasdaq Composite was unchanged on Wednesday.

The nearest important resistance level of the S&P 500 index remains at around 2,785-2,800, marked by the previous medium-term local highs. On the other hand, the support level is at around 2,760, marked by the Friday's daily gap up of 2,757.90-2,760.24. The support level is also at 2,720, marked by the last Tuesday's daily gap up of 2,718.05-2,722.61.

The broad stock market retraced almost all of its December sell-off and it got closer 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

 

S&P 500 Just below 2,800

Expectations before the opening of today's trading session are virtually flat, because the index futures contracts trade between 0.0% and +0.1% vs. their yesterday's closing prices. The European stock market indexes have been mixed so far. Investors will wait for series of economic data announcements today: Durable Goods Orders, Philadelphia Fed Manufacturing Index, Initial Claims at 8:30 a.m., Flash Manufacturing PMI at 9:45 a.m., CB Leading Index, Existing Home Sales at 10:00 a.m., Crude Oil Inventories at 11:00 a.m. The broad stock market will likely continue to fluctuate following its last week's rally. We may see some more uncertainty, as the market remains close to the medium-term resistance level.

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