The main U.S. stock market indexes lost between 0.8% and 1.3%, as investors feared that the Fed will finally start to trim its stimulus program following better-than-expected economic data announcements. The S&P 500 index is almost two percent below its November 29 all-time high of 1,813.55. However, it remains in a few-week long consolidation, above the important support of 1,770-1,775. Will it break below these levels, forming a negative head and shoulders pattern? For now, it looks like a topping consolidation, as the daily chart shows:

Expectations before the opening of today’s session are slightly negative, with index futures currently down 0.1-0.2%. The European stock market indexes have lost 0.3-0.9% so far. Investors will now wait for the economic data releases: Retail Sales and Initial Claims at 8:30 a.m., Business Inventories at 10:00 a.m. The S&P 500 futures contract (CFD) trades in a relatively narrow range following yesterday’s sell-off. The nearest support is at 1,775-1,780, marked by the previous local low. On the other hand, the resistance remains at 1,800-1,810, as we can see on the 15-minute chart:

Our intraday outlook remains bearish, and our short-term outlook is bearish:

Intraday (next 24 hours) outlook: bearish
Short-term (next 1-2 weeks) outlook: bearish
Medium-term (next 1-3 months) outlook: neutral
Long-term outlook (next year): bullish

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Thank you,
Paul Rejczak