The major U.S. stock market indexes were flat yesterday, as investors feared the possibility of a correction. The ongoing earnings releases encourage optimism, but the market may enter a short-term correction phase at some point. The S&P500 index tests its May 22 all-time high of 1,687.18, still unable to move beyond that resistance level and therefore some more medium-term consolidation scenario cannot be ruled out, as the daily chart shows:

In the short-term the S&P500 futures contract (CFD) penetrated its accelerated trend line, reaffirming the resistance zone at 1,675-1,685. Looking down, the support is at 1,640-1,650, marked by some of the previous resistance levels and an almost month-long upward trend line, as we can see on the 15-minute chart:

The cash market is expected to open flat today, extending its short-term consolidation. The mixed situation of the European stock markets supports further uncertainty, as the announcement of the ZEW Economic Sentiment Index for Germany came in worse than expected earlier this morning. Investors will wait for some key U.S. economic data announcements now: the Consumer Price Index at 7:30 a.m. and the Industrial Production data at 9:15 a.m.

Thank you,
Paul Rejczak