The stock market extends its week-long consolidation – is this still a potential bottoming pattern?
The S&P 500 index lost 0.40% on Tuesday, as it bounced from the 3,800 level once again. Last Thursday, it reached a medium-term low of 3,764.49 before bouncing back above 3,800.
Overall it extended a week-long consolidation following the decline from the 4,100 level. Recently the S&P 500 has been negatively reacting to the Dec. 14 FOMC interest rate hike, among other factors.
Today the S&P 500 will likely open 0.1% higher, and we may see more uncertainty and consolidation along the 3,800 level. In early December, the S&P 500 index broke below its two-month-long upward trend line, and recently it moved sharply lower after getting back to that line, as we can see on the daily chart:
Futures Contract – Still Close to 3,850
Let’s take a look at the hourly chart of the S&P 500 Futures contract. This morning it is trading within a relatively narrow price range. The resistance level remains at 3,900-3,920, and on the other hand, the support level is at 3,800.
Conclusion
The S&P 500 index keeps extending its consolidation following the mid-month sell-off. Today we may see a quite neutral opening of the trading session.
There have been no confirmed positive signals so far. However, stocks may be forming a bottom here.
Here’s the breakdown:
- The S&P 500 index extended its short-term consolidation on Tuesday.
- There have been no confirmed positive signals so far. However, stocks may be forming a bottom.