S&P 500 Hovers Along New Medium-Term Highs: Is This a Topping Pattern?

12/18/2023

1 minute read

2023.12.18 10:20

Sunshine Profits

The lost 0.01% on Friday as it went sideways following the recent rally. On Wednesday and Thursday, the market rallied after the FOMC Statement release and on Friday investors were taking some profits off the table. On Thursday the daily high was at 4,738.57, and it was the highest since January of 2022.

On Wednesday the Fed basically announced a pivot in its monetary policy – stocks, bond prices, precious metals rallied, and the sold off. Recently the S&P 500 broke above its late July local high of around 4,607. It resumed the rally from the October 27 local low of 4,103.78.

Stocks are expected to open 0.2% higher today. So the S&P 500 will further extend its short-term consolidation and for now, a relatively flat correction of the recent advances. The S&P 500 remains close to its new yearly high as we can see on the daily chart:

SPX-Daily Chart

Futures Contract Trades Along 4,780

Let’s take a look at the hourly chart of the contract. It is still trading sideways. The nearest important resistance level is at 4,790-4,800 and the support level is at 4,750, among others.

SPX Futures 1-Hour Chart

Apple Stock Is Below Important $200 Mark

Let’s move on to an individual stock. Apple (NASDAQ:) is one of the most important market movers. On Thursday it reached new all-time high price of $199.62. Since then it’s going sideways, just like the broad stock market’s index. It looks like a topping pattern or just some flat correction following the rally. Nevertheless, $200 mark remains an important resistance level here.

Apple-Daily Chart

Conclusion

The S&P 500 will likely continue its short-term consolidation this morning. On Thursday and Friday, there was a profit-taking action and uncertainty following the recent rally.

There have been no confirmed negative signals so far, but the market may see a downward correction at some point.

Here’s the breakdown: