The major U.S. stock market indexes gained 0.9-1.3% yesterday, extending their recent uptrend as investors hoped for the end of a month-long downward correction. The S&P500 index managed to close the August 27 daily gap down at 1,652.54-1,656.02 and broke above the resistance level at around 1,670, marked by the August 26 local top, which is a positive sign. The next possible level of resistance is at 1,679.61-1,684.83, marked by the August 15 daily gap down. There is a bull-flag type pattern forming (trend continuation pattern), as we can see on the daily chart:

Expectations before the opening of today’s session are positive, as index futures gain 0.4-0.5% right now. The European stock markets have been up 0.8-1.5%, following yesterday’s gains in the U.S. The S&P500 futures contract (CFD) is in a short-term uptrend, after breaking above the month-long downward trend line. However, the market is approaching a potential level of resistance at 1,680-1,690, marked by the first half of August consolidation. On the other side, the nearest important support level is currently at around 1,665, marked by some of the recent local tops, as the 15-minute chart shows:

Thank you,
Paul Rejczak