Probably just an upward correction, but...

Earnings season is in full swing. We will see earnings releases from Microsoft, Amazon, Intel today. Stocks sold off on Tuesday, but yesterday's trading session was pretty neutral. Is this a short-term bottoming pattern or just quick flat correction before another leg down? We may see some more uncertainty ahead of earnings releases and investors will continue to react to bonds yield changes. There are still two possible medium-term scenarios.

The main U.S. stock market indexes were mixed between -0.1% and +0.3% on Wednesday, as investors hesitated following Tuesday's move down. The broad stock market traded along Wednesday's closing prices. The S&P 500 index is currently 8.1% below its January 26 record high of 2,872.87. The Dow Jones Industrial Average gained 0.3% and the technology Nasdaq Composite lost 0.1% yesterday.

The nearest important level of resistance of the S&P 500 index remains at 2,645-2,655, marked by recent fluctuations. The next resistance level is at 2,680-2,700, among others. On the other hand, support level is at 2,615-2,620, marked by local lows. The next level of support is at 2,590-2,600, marked by upward trend line. The support level is also at 2,530-2,550, marked by previous local lows.

The broad stock market got closer to its medium-term upward trend line again. Stocks bounced off this line in the early April. Will they bounce again? If the index breaks lower, it could quickly continue towards the February 9 low of 2,532.69. However, stocks remain within their over two-month-long consolidation following early February sell-off. Is this a bottoming pattern before another leg higher within the long-term bull market? Or just pause before another wave of selling? So, there are still two possible future scenarios - bearish that will lead us below February low following trend line breakdown, and the bullish one in a form of medium-term double top pattern or breakout towards 3,000 mark. Stocks bounced off the resistance level in the middle of last week, and they accelerated lower on Tuesday:

Bottoming Pattern or Just Flat Correction?

The index futures contracts trade between +0.2% and +0.5% vs. their yesterday's closing prices. So, expectations before the opening of today's trading session are positive. Tech stocks may open higher following yesterday's better-than-expected Facebook, Inc. quarterly earnings release. The European stock market indexes have been mixed so far. Investors will wait for some economic data announcements: Initial Claims, Durable Goods Orders, Wholesale Inventories, Trade Balance at 8:30 a.m. Will the broad stock market bounce today? There may be some buying pressure ahead of several big cap tech stocks' after-hours quarterly earnings releases.

The S&P 500 futures contract trades within an intraday consolidation following overnight move up. The market retraces some of its Tuesday's move down, but it continues to trade below recent local lows. The nearest important level of resistance is at around 2,660, and the next resistance level is at 2,680-2,690, marked by recent local highs. On the other hand, support level is at 2,640, and the next level of support is at 2,610-2,620, marked by short-term local lows. The futures contract trades close to its short-term downward trend line, as the 15-minute chart shows:

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