Stocks extended their downtrend yesterday, but the index closed virtually flat. So was it a short-term bottom? The S&P 500 index lost 0.1% on Thursday, Jan. 6, as it fluctuated following Wednesday’s sell-off of almost 2%. The market reached a new local low at 4,671.26 before bouncing back closer to the 4,700 level. So it traded almost 150 points below Tuesday’s record high of 4,818.62. The recent consolidation along the 4,800 level was a topping pattern. And the market got back to its November-December trading range.
On Dec. 3 the index fell to the local low of 4,495.12 and it was 5.24% below the previous record high. So it was a pretty mild downward correction or just a consolidation following last year’s advances.
The nearest important resistance level is now at 4,700-4,720, and the next resistance level remains at around 4,750. On the other hand, the support level is now at 4,650, marked by some previous local highs. The S&P 500 remains close to the November’s-December’s consolidation local highs, as we can see on the daily chart.
Apple price broke below the trend line
Apple stock broke below its two-month-long upward trend line on Wednesday after reaching the new record high of $182.94 on Tuesday. So far, it looks like a downward correction and the nearest important support level is at $165-170, marked by the previous highs and lows.
Is this a medium-term topping pattern? It’s getting very hard to fundamentally justify Apple’s current market capitalization of around $3 trillion.
The S&P 500 index is expected to open 0.2% lower today. So the volatility is on the light side after the mixed monthly jobs data release from this morning. We may see some more short-term fluctuations and possibly an intraday upward correction.
Here’s the breakdown:
The S&P 500 fluctuated following its Wednesday’s sell-off.
Jobs data release was mixed and rather neutral for the markets.
In our opinion no positions are currently justified from the risk/reward point of view.
Want free follow-ups to the above article and details not available to 99%+ investors? Sign up to our free newsletter today!