Are We Getting Close to Breaking Out?

As stock prices fluctuate after their mid-June sell-off, there is still no obvious direction. Is this a bottoming pattern, then?

As it continued to wobble below the 3,800 mark, the S&P 500 index dropped 0.13 percent on Wednesday. It had previously fallen to a new medium-term low of 3,636.87 after retracing last week's dip from Wednesday to Friday. On Friday, the market was 1,181.75 points, or 24.5 percent, lower than its all-time high of 4,818.62 set on January 4. And on Tuesday, it increased to almost 3,780. But yesterday, purchasers stopped at the 3,800 level.

Concerns and uncertainties are prevalent over inflation figures, the Fed's tightening of monetary policy, and the crisis between Russia and Ukraine. At 10:00 a.m. today, we will hear from another Fed Chair Powell. Following a fall from the 3,800 mark overnight, the S&P 500 index will probably start this morning 0.5% higher.

The prior support level serves as the closest significant resistance level, which is located between 3,800 and 3,850. 3,900 is where the resistance level is as well. The support level, however, is between 3,650 and 3,700.

Futures Contract Is Still Under the 3,800 Level

Viewing the hourly chart of the S&P 500 futures contract will help. It deviated from the prior consolidation last week. The market fell below the 3,700 mark on Friday, setting a fresh medium-term low. It is varying slightly below the 3,800 level that serves as a short-term barrier this morning. (Chart with kind permission of Tradingview)

Conclusion

This morning, the S&P 500 index is expected to start off 0.5% higher, and we could witness another effort to break above the 3,800 mark. It appears to be a bottoming pattern or a consolidation within a decline at this time.

breaks down:

After its drop in mid-June, the S&P 500 index is still swaying inside a consolidation.

We could observe more attempts to surpass recent local highs.