The S&P 500 continues to fluctuate along the 4,700 level. So is this a topping pattern or just a flat correction before another leg up?
The S&P 500 index extended its Monday’s decline yesterday, as it fell to the daily low of 4,652.66. But it closed 0.17% higher following an intraday rebound. The market rebounded to the 4,700 level again. The broad stock market keeps trading within a mor-than-two-week-long consolidation. For now, it looks like a flat correction within an uptrend. However, it may also be a topping pattern before some more meaningful downward reversal.
The nearest important support level remains at 4,630-4,650 and the next support level is at 4,600. On the other hand, the resistance level is at 4,700-4,750. The S&P 500 continues to trade along the 4,700 level, as we can see on the daily chart (chart by courtesy of http://stockcharts.com):
Nasdaq Broke Below Trend Line
Let’s take a look at the Nasdaq 100 chart. The technology index reached the new record high on Monday, led by the mega-cap tech stock rallies, but it reversed its intraday course, and yesterday it fell below the 16,200 level. The index broke below its short-term upward trend line, as we can see on the daily chart:
Apple and Microsoft – a Potential Reversal
Let’s take a look at the two biggest stocks in the S&P 500 index, Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT). Apple accelerated its uptrend on Monday and Microsoft slightly extended its recent advance. Both reached the record highs before reversing lower. Yesterday they were mixed, and today we may see some more short-term uncertainty.
