The U.S. stock market indexes lost between 1.2% and 2.1% on Friday, following Thursday’s quarterly earnings releases from Amazon and Alphabet. The S&P 500 index has reached the new medium-term low at the level of 2,628.16. It was 10.6% below September the 21st record high of 2,940.91. It currently trades 9.6% below the all-time high. The Dow Jones Industrial Average lost 1.2% and the Nasdaq Composite lost 2.1% on Friday.

The nearest important level of resistance of the S&P 500 index is now at around 2,690-2,700, marked by the previous support level. The next resistance level is at 2,730, marked by the long-term upward trend line. The resistance level is also at 2,750-2,760. On the other hand, the support level is at 2,630-2,650. The level of support is also at around 2,600, marked by the early May local low of 2,594.62.

The broad stock market continued the downtrend on Friday, as the S&P 500 index fell below its Wednesday’s local low. There have been no confirmed positive signals so far. However, we could see an attempt at reversing higher here. The S&P 500 index fell almost 11% off its late September record high, so the downward correction is still slightly smaller than January’s-February’s sell-off of 12%:

Positive Expectations, Reversal or Just Bounce?

Expectations before the opening of today’s trading session are positive because the index futures contracts trade 0.4-1.0% above their Friday’s closing prices. The European stock market indexes have gained 0.3-1.8% so far. Investors will wait for some economic data announcements this morning: Personal Income, Personal Spending, Core PCE Price Index at 8:30 a.m. Investors will also wait for more quarterly earnings releases. The broad stock market will likely retrace some of its Friday’s decline today. We may see an attempt at getting closer to 2,700 mark again (S&P 500 index). We can still see short-term technical oversold conditions.