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Stocks Consolidate Following Recent Sell-Off


Expectations before the opening of today's session are negative, with index futures currently down 0.2-0.3%.

The US stock market indices gained between 0.5% and 0.9% yesterday, bouncing off recent lows, as investors hoped for a short-term downtrend reversal. The S&P 500 Index (INDEXSP:.INX) traded within the lower half of Monday's trading range, below the resistance off 1,770-1,775, marked by previous support. On the other hand, there is a possible support at around 1,730, marked by last September's local high of 1,729.86. For now, it looks like a rather flat correction following a recent sharp decline, as we can see on the daily chart:

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Expectations before the opening of today's session are negative, with index futures currently down 0.2-0.3%. The main European stock market indices have been mixed so far. Investors will now wait for some economic data announcements: ADP Employment Change report at 8:15 a.m. and ISM Services number at 10:00 a.m. The S&P 500 futures contract (CFD) remains in a relatively narrow trading range, extending consolidation following Monday's sell-off. The support is at around 1,735-1,740, and the resistance is at 1,750:

Click to enlarge

The technology Nasdaq-100 (INDEXNASDAQ:NDX) futures contract (CFD) bounced off Monday's low, however, there is no clear trend, just a consolidation following recent move down. The resistance is at around 3,470, and the support is at 3,425-3,430, as the 15-minute chart shows:

Click to enlarge

For the full version of this essay and more, visit Sunshine Profits' website.

Paul Rejczak is a stock market strategist who has been known for the quality of his technical and fundamental analysis since the late 1990s. 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. He is the author of Sunshine Profits' premium service for stock traders: Stock Trading Alerts.
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