The U.S. stock market indexes gained 2.1-2.6% on Wednesday, breaking above the short-term consolidation, as investors’ sentiment improved following the U.S. Elections. The S&P 500 index was 11.5% below September the 21st record high of 2,940.91 on last week’s Monday. And now it trades just 4.3% below the all-time high. The Dow Jones Industrial Average gained 2.1% and the Nasdaq Composite gained 2.6% yesterday.

The nearest important level of resistance of the S&P 500 index is now at around 2,815-2,820, marked by mid-October local high of 2,816.94. The next resistance level is at 2,860-2,865, marked by the previous local lows. On the other hand, the support level is now at 2,780-2,800, marked by the recent resistance level. The support level is also at 2,755-2,775, marked by yesterday’s daily gap up of 2,756.82-2,774.13.

The broad stock market extended its downtrend more than a week ago, as the S&P 500 index fell closer to 2,600 mark. Then it bounced sharply and accelerated higher on Wednesday. Yesterday we wrote that if the index breaks above 2,750, we could see more buying pressure. And the market got back above the broken long-term upward trend line. It is also back above 2,800 mark again. However, the index is at its mid-October local high. Will it continue higher? Well, it still looks like an upward correction following the October sell-off:

Negative Expectations, Just Consolidation?

Expectations before the opening of today’s trading session are negative, because the index futures contracts trade 0.3-0.6% below their Wednesday’s closing prices. The European stock market indexes have been mixed so far. Investors will wait for some economic data announcements today: Initial Claims at 8:30 a.m., the FOMC Statement – Federal Funds Rate Decision at 2:00 p.m. The broad stock market will likely fluctuate following yesterday’s rally. We may see some increased volatility after the Fed’s Rate Decision release. The S&P 500 index will probably trade within a consolidation along the level of 2,800.