Apple and Amazon results may hold the key to any market rebound. Here's the technical set-up.

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Earnings from the tech behemoths due after Thursday's closing bell may determine whether the market can halt the latest slide

Early trading in stock-index futures shows Wall Street on Thursday extending the previous session’s sell-off. The S&P 500’s Wednesday slide of 1.4% was its biggest in more than three months and coincided with news that the U.S. government’s credit rating had been downgraded.

Where markets go next thus may depend on what happens after Thursday’s closing bell, when Apple AAPL and Amazon.com AMZN , whose market capitalizations combined make up more than 10% of the S&P 500’s total value, will deliver their earnings . That said, a rally for Amazon.com stock back above $133.87 would allow for an advance to $148 by early September, at which point it might find a 61.8% Fibonacci-based area of resistance.

Any fall to $180 would fine very strong support, while a rally back above $198 would help the shares possibly power to $215. “However, AAPL has ongoing momentum issues and has gotten overbought on multiple timeframes, which makes chasing rallies difficult for most investors,” Newton concludes. The buzz Economic data on Thursday include the weekly initial jobless claims and second quarter productivity, due at 8:30 a.m. Eastern. The July S&P services PMI is released at 9:45 a.m., followed a quarter of an hour later by the ISM services report for July and June factory orders.

 

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