The U.S. stock market indexes lost 0.6-1.1% on Friday, extending their recent decline, as investors reacted to the monthly jobs data release. The S&P 500 index has reached its late January local high of around 2,873, before closing above the level of 2,885. It currently trades 1.9% below September the 21st record high of 2,940.91. The Dow Jones Industrial Average lost 0.7% and the Nasdaq Composite lost 1.2% on Friday, as tech stocks continued to act relatively weak vs. the broad stock market.
The nearest important level of support of the S&P 500 index is now at around 2,870-2,875, marked by the mentioned late January local high. The next support level is at 2,850-2,855, among others. On the other hand, the resistance level is at 2,880-2,900, marked by the recent price action. The level of resistance is also at 2,915-2,920, marked by the Thursday’s daily gap down of 2,919.78-2,921.36.
The broad stock market retraced its September’s record breaking rally recently, as the S&P 500 index broke below its three-month long upward trend line. Is this a new downtrend or just some medium-term consolidation along the new record high? If the index remains above the late January local high, we could see more fluctuations:
Uncertainty Following the Decline
Expectations before the opening of today’s trading session are negative, because the index futures contracts trade 0.3-0.4% below their Friday’s closing prices. The European stock market indexes have lost 0.6-0.9% so far. There will be no new important economic data announcements today. The broad stock market will likely fluctuate along its recent local lows today. We may see an attempt at bouncing off a support level of the late January high. But for now, it looks like a flat correction within a downtrend. If the index gets back above the level of 1,900, we could see more buying pressure.
The S&P 500 futures contract trades within an intraday consolidation following an overnight decline. The nearest important level of resistance is now at 2,900, marked by some short-term local highs. The next resistance level is at 2,915-2,920, among others. On the other hand, the support level is now at 2,875-2,880, marked by Friday’s local low. The futures contract continues to trade below its short-term downward trend line, as we can see on the 15-minute chart:
