The U.S. stock market indexes gained 0.5-0.9% yesterday as the so-called “old economy” sector stocks caught up with the recently relatively strong technology stocks. Investors hope for the end of a month-long downward correction. The S&P500 index approached the July-August consolidation area and managed to close inside the August 15 daily gap down of 1,679.61-1,684.83. The nearest important level of resistance is at around 1,685, marked by the gap down and the July-August consolidation’s lower limit. On the other hand, the support is currently at 1,672.40-1,674.32, marked by yesterday’s daily gap up. The index is testing its nearest resistance, approaching the all-time high area, as we can see on the daily chart:

The cash market is expected to open virtually flat today, as the main European stock market indexes have been mixed. We may see some short-term consolidation at this level, as investors begin to take profits after the recent run up, especially in the technology stocks. The S&P500 futures contract (CFD) fluctuates in a rather tight range, just below the level of resistance at around 1,680-1,690, marked by the first half of the August consolidation. The support level is at around 1,665, marked by some of the recent local tops, as the 15-minute chart shows:

Thank you,
Paul Rejczak