Uncertainty Following Recent Advance, S&P 500 Still Below 2,700

The U.S. stock market indexes gained 0.5-1.0% on Wednesday, extending their short-term uptrend, as investors' sentiment remained slightly bullish after the Monday's rebound off the new medium-term low of 2,583.23. The S&P 500 index traded 12.2% below September the 21st record high of 2,940.91. It is currently 9.8% below the all-time high. The Dow Jones Industrial Average gained 0.6% and the Nasdaq Composite gained 1.0% on Wednesday.

The nearest important level of resistance of the S&P 500 index is at around 2,675-2,685, marked by some recent fluctuations. The resistance level is also at 2,695-2,700, marked by last Thursday's daily gap down of 2,696.15-2,697.18. On the other hand, the support level is now at 2,630-2,650. The level of support is also at2,580-2,600, marked by the medium-term local lows.

The broad stock market reversed its recent upward course following the S&P 500 index' reversal off the resistance level at 2,800. On Thursday a week ago the market broke below 2,700 mark, as it retraced more of the rally. On Monday it fell the lowest since the early April, before bouncing off and getting above 2,600 mark at the end of the day. The index continues to trade above its previous medium-term lows, as we can see on the daily chart:

(Click on image to enlarge)

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

Mixed Expectations

The index futures contracts trade between -0.3% and +0.1% vs. their yesterday's closing prices. So expectations before the opening of today's trading session are slightly negative to virtually flat. The main European stock market indexes have been mixed so far. Investors will now wait for some economic data announcements: the ECB Rate Decision at 7:45 a.m., Initial Claims at 8:30 a.m. The broad stock market will likely continue to fluctuate following its Monday's rebound. We may see another attempt at breaking above the short-term resistance levels. It still looks like a volatile medium-term consolidation following the October decline despite Monday's sell-off below 2,600 mark.

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