The U.S. stock market indexes lost 0.1-0.6% yesterday, after attempting to rebound from last week’s drop. Investors continue to worry the Federal Reserve will end its bond-buying program. So, the market extends the correction lower as more investors cash out. The S&P500 index broke below the June-August uptrend’s 38.2% Fibonacci retracement at 1,652.62 yesterday. The nearest level of resistance is at around 1,635.00, marked by the uptrend’s 50% retracement and the early July short-term consolidation’s upper limit, as we can see on the daily chart:

Expectations before the opening of today’s session are virtually flat, despite the fact that the main European stock markets have lost 0.6-1.4% following the Nikkei plunge of almost 3% earlier in the morning in Japan. With no important economic data announcements today, investors are likely to react emotionally, following the direction of the current trend, although there is a growing anticipation of a technical rebound. The S&P500 futures contract (CFD) is in a clear short-term downtrend, just like the cash market. The potential level of support is at around 1,640-1,650, marked by some of the earlier support and resistance levels, as the 15-minute chart shows:

Thank you,
Paul Rejczak