Stocks: More Volatility Following Hawkish Powell
Stock prices were volatile on Tuesday, as the fell to the new local low. But today it may rebound again.
Will Downtrend Continue?
The S&P 500 index lost 1.90% on Tuesday, Nov. 30. The market went lower following testimonies from the Fed Chair Powell and the Treasury Secretary Yellen. On Monday the broad stock market retraced more than a half of its Friday’s sell-off, but yesterday it fell to the new local low of 4,560.00. Today it is expected to open 1.0% higher again, so we will see more short-term volatility.
The nearest important support level is at 4,560-4,600. On the other hand, the resistance level is at 4,650, marked by the recent local lows. The S&P 500 retraced most of its early November advance, as we can see on the daily chart. :
Chart by courtesy of http://stockcharts.com
NASDAQ 100 Remains Relatively Stronger
Let’s take a look at the chart. The technology index remained relatively stronger than the broad stock market yesterday, as it didn’t extend a short-term downtrend. It remained above its Friday’s local low and above the 16,000 mark, as we can see on the daily chart:
Apple Got Close To Its Record High Again
The biggest stock in the S&P 500 index—Apple. accelerated its uptrend a week ago and it reached the new record high of $165.70. However, it retraced almost all of its intraday advance that day. On Friday it got back to a support level of around $157. And yesterday it got back to the all-time high, as it closed slightly above the $165 price level.
The S&P 500 index is expected to open 1.0% higher this morning following an overnight rebound from the yesterday’s new short-term low. We will likely see an intraday consolidation following a higher opening. And for now, it looks like a consolidation within a short-term downtrend.
Here’s the breakdown:
- The S&P 500 extended its short-term downtrend yesterday, but today it is expected to open higher again.
- A speculative short position is still justified from the risk/reward perspective.
- We are expecting a 5% correction.
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