S&P 500 at 2,800 again, breakout or fakeout?

Nasdaq at New Record High

The technology Nasdaq 100 futures contract is relatively stronger than the broad stock market, as it currently trades along new record high following Friday's breakout above 7,100 mark. It gained around 1,000 points off its February 9 bottom, as it remarkably retraced all of its late January - early February sell-off in one month. Topping euphoria run? Or just another leg higher within multi-year bull market? We will wait and see if this breakout holds - if the market stays above its previous local high of 7,050. The nearest important level of support is at around 7,100-7,120, marked by Friday's move up, and the next level of support is at 7,000-7,050. On the other hand, potential resistance level is at 7,200. The Nasdaq futures contract trades much above its short-term upward trend line, as we can see on the 15-minute chart:

Amazon Continues Higher While Apple Lags

Let's take a look at Apple, Inc. stock (AAPL) daily chart (chart courtesy of http://stockcharts.com). It was one of February stock market rout's main drivers. Then it led broad stock market rebound rally. It fell close to support level of $150 on February 9. Since then it was retracing its early February losses. The market reached new record high two weeks ago, as it was trading slightly above $180 mark. Then it retraced some of its short-term uptrend, but it got closer to record high again on Friday. Will it reach new record high soon? It may continue higher, but we see some negative medium-term technical divergences - the most common divergences are between asset’s price and some indicator based on it (for instance the index and RSI or MACD based on the index). In this case, the divergence occurs when price forms a higher high and the indicator forms a lower high. It shows us that even though price reaches new highs, the fuel for the uptrend starts running low:

Amazon.com, Inc. stock (AMZN) continues its upward march, as it reaches new record highs and gets closer to the price of $1,600. The stock continues to trade well above its end-of-year closing price of $1,167.5. AMZN bounced off its upward trend line a month ago following downward correction below the price of $1,300. There have been no confirmed negative signals so far. There are still some negative technical divergences along with overbought conditions, but the stock remains remarkably stronger than the broad stock market:

Page 2 of 3