Stocks reached new highs, but a correction may be coming.The S&P 500 index lost 0.9% on Wednesday as it backed off from a new medium-term high of 4,587.64. The market extended its uptrend, but it closed near its daily low. The S&P 500 was the highest since July 31 yesterday.Recently the S&P 500 broke above the resistance level marked by the technically important September 21 daily gap down of around 4,376-4,401. Stocks rallied despite uncertainty about monetary policy, economic growth, and geopolitics. The market resumed its rally from the October 27 local low of 4,103.78 and then it reached another important resistance level, marked by the August 2 daily gap down of 4,550.93-4,567.53. Yesterday it closed below that gap.Stocks are expected to open 0.3% higher today. So the S&P 500 will continue to fluctuate within a short-term consolidation. It is still close to 4,550 level as we can see on the daily chart: 
Futures Contract Trades Sideways
Let’s take a look at the hourly chart of the S&P 500 futures contract. Last week on Monday it broke above the recent trading range above 4,500 level and it went close to the resistance level of around 4,570. The next resistance level is at 4,600. On the other hand, the support level is now at 4,540-4,550. 
Conclusion
Stock prices will likely extend their short-term consolidation this morning. There have been no confirmed negative signals so far. However, there are short-term overbought conditions that may lead to a correction at some point.Here’s the breakdown:
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