US stocks remain just shy of record peaks

Summary:

• US500 higher on the day but below weekly high

• Yesterday saw the market end its run of consecutive daily gains

• Wholesale inventories unexpectedly decline

It’s been a fairly steady and unspectacular week as far as US indices are concerned, with the US500 edging back closer to its record peak. The US100 is also not far from its all-time high, but an inside candle on both these markets yesterday ended a run of consecutive daily gains. Let’s look at each of these in turn and view what the current technical situation is and some possible levels to keep an eye on.

US500

The outlook for this market remains positive with nearly all trend identification tools pointing higher. The weekly high at 2864 is the first reference point for possible resistance and if price can break above here then another attempt at the record peak of 2880 seems likely. However, do note that the market ended a run of 4 successive daily gains yesterday and the RSI is struggling to extend its gains and indicate strong buying momentum. A daily drop below 2845 would offer the bears a chance to push price lower but its not until the prior breakout level around 2795 is moved below that any substantial declines could occur.

The US500 is pushing higher but it is struggling around recent highs a little. Today's trade and tomorrow's could well determine whether we see new record peaks for this market or whether it comes up just short. Source: xStation

US100

This market is looking more bullish than the broader US500 with price approaching 7500 once more and trading not far from its record peak of 7528. Price is now attempting to take out Wednesday’s high and if it does then it would negate the lower close seen yesterday. The RSI shows there’s good momentum at present but the market isn’t heavily oversold. If price can move decisively past the prior peak of 7528 then a sustained breakout to the upside could lie in store.

The US100 looks a little stronger than the US500 of late, with the market taking out its weekly high this afternoon and closing in on 7500 once more. Price is just 30 points from its all-time high at 7528. Source: xStation 

We earlier noted that US PPI data had come in below forecast and that initial jobless claims were a beat. The final economic release from North America of note this afternoon is the latest wholesales inventory number which showed an unexpected contraction. In M/M terms they fell by 0.1% compared to an expected increase of 0.2% and while this is obviously a negative, it isn’t really too big a miss in the grand scheme of things and it is unlikely to have much impact on Q3 GDP.