Briefly:

Intraday trade: The S&P 500 index was unchanged on Tuesday after opening virtually flat. The broad stock market will probably open slightly higher today. We may see more short-term uncertainty, as the index remains relatively close to its record high. We prefer to be out of the market, avoiding low risk/reward ratio trades.

Trading position (short-term; our opinion): no short-term positions are justified from the risk/reward perspective.

Our intraday outlook is neutral. Our short-term outlook is neutral, and our medium-term outlook is neutral:

Intraday outlook (next 24 hours): neutral
Short-term outlook (next 1-2 weeks): neutral
Medium-term outlook (next 1-3 months): neutral

The U.S. stock market indexes were mixed between -0.5% and +0.5% on Tuesday, as investors hesitated following the recent advance. The S&P 500 index has reached the new record high of 2,940.91 on September the 21st. It currently trades just 0.6% below that high. The Dow Jones Industrial Average gained 0.5% and the technology Nasdaq Composite lost 0.5% yesterday.

The nearest important level of support of the S&P 500 index remains at around 2,915-2,920, marked by the recent consolidation. The next support level is at 2,900. The support level is also at 2,885-2,890. On the other hand, the nearest important level of resistance remains at around 2,925-2,930, marked by the last week's Monday's daily gap down of 2,923.79-2,927.11. The resistance level is also at 2,940, marked by the record high.

The broad stock market reached the new record high recently, as the S&P 500 index extended its short-term uptrend above the level of 2,900. Will it continue higher despite some short-term technical overbought conditions? The index keeps bouncing off its three-month-long upward trend line following last Wednesday's intraday reversal, as we can see on the daily chart:

Still Close to Record High

Expectations before the opening of today's trading session are slightly positive, because the index futures contracts trade 0.2-0.3% higher vs. their Tuesday's closing prices. The European stock market indexes have been mixed so far. Investors will wait for some economic data announcements today: ADP Non-Farm Employment Change number at 8:15 a.m., ISM Non-Manufacturing PMI at 10:00 a.m., Crude Oil Inventories at 10:30 a.m. There will also be some speeches from the FOMC Members along with the Fed's Chairman Powell's speech at 4:00 p.m. The broad stock market will likely extend its short-term fluctuations after the recent record-breaking advance. Will the index break above the mentioned September's record high? It's hard to say. If it breaks higher, we could see more buying pressure. There have been no confirmed negative signals so far.

The S&P 500 futures contract trades within an intraday consolidation following an overnight advance. The nearest important level of resistance is still at around 2,940-2,945, marked by the record high. On the other hand, the support level is at 2,910-2,920, marked by the recent fluctuations. The support level is also at 2,900-2,905, among others. The futures contract extends its short-term consolidation, as we can see on the 15-minute chart:

Nasdaq Below 7,700 Mark

The technology Nasdaq 100 futures contract follows a similar path, as it continues to fluctuate relatively close to the record high. The tech stocks' gauge broke above the level of 7,700 recently and it reached the new record high of around 7,729, before reversing lower. The nearest important support level remains at 7,600-7,620. On the other hand, the level of resistance is at 7,680-7,700, among others. The Nasdaq futures contract remains slightly below its week-long upward trend line, as the 15-minute chart shows:

Apple at New Record High, Amazon Lags

Let's take a look at Apple, Inc. stock (AAPL) daily chart (chart courtesy of http://stockcharts.com). It reached the new record high at the level of $230.00 yesterday, as it slightly exceeded its early September high of around $229.70. The stock has retraced its month-long correction. But will it continue upwards? We can see some short-term negative technical divergences:

Now let's take a look at Amazon.com, Inc. stock (AMZN) daily chart. It was relatively weaker yesterday, as it got back below the price of $2,000. The stock remains below the month-long upward trend line but it is still above the medium-term upward trend line:

Dow Jones Reaches New Record

The Dow Jones Industrial Average reached the new all-time high at the level of 26,824.78 yesterday after bouncing off its two-month-long upward trend line earlier in the week. The support level remains at around 26,350, marked by the recent local low. On the other hand, potential resistance level is at 27,000:

The S&P 500 index remains close to its late September record high, but it continues to trade below the level of 2,930. The broad stock market fluctuates following the recent advance. For now, it looks like a relatively flat correction within a medium-term advance, because the index still trades above its upward trend line.

Concluding, the S&P 500 index will probably open slightly higher today. The market trades just 0.6% below its September the 21st high of 2,940.91, so it looks like a relatively flat correction within an uptrend. There have been no confirmed medium-term negative signals so far. But if the index breaks below the mentioned trend line, we could see some more meaningful downward reversal. Investors will now wait for the FOMC Members speeches and the economic data releases.

Intraday trade:

No intraday position is justified from the risk/reward perspective today.

Trading position (short-term; our opinion): no short-term positions are justified from the risk/reward perspective.

Thank you.

Paul Rejczak
Stock Trading Strategist
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