Briefly: In our opinion, no speculative positions are justified.

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

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

The U.S. stock market indexes gained 0.5-0.7% on Monday, retracing last week’ move down, as investors awaited quarterly earnings releases, economic data announcements, hoping for a continuation of the long-term uptrend. The S&P 500 index got closer to its July 3 all-time high of 1,985.59. The level of resistance is at 1,980-1,985, and the next resistance is at the psychological 2,000. On the other hand, the support level is at around 1,950-1,960, marked by recent local lows. Earnings season can be a time of increased volatility as investors react to news from the companies. So, it may be better to cut back on your trading or even move to the sidelines completely, especially following recent run-up. However, there have been no confirmed negative signals so far. The index remains above its upward trend line, which is positive:

Expectations before the opening of today’s session are virtually flat, with index futures currently down 0.1%. The main European stock market indexes have lost 0.2-0.5% so far. Investors will now wait for some economic data announcements: Retail Sales, Empire Manufacturing at 8:30 a.m., Business Inventories at 10:00 a.m. The S&P 500 futures contract (CFD) is in an intraday downward correction, following yesterday’s move up. The resistance level is at around 1,975, marked by recent highs. On the other hand, the level of support is at 1,960-1,965, among others, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract (CFD) is close to long-term highs, as it trades above early July local highs. The nearest important level of support is at around 1,915. On the other hand, the resistance remains at 3,930. For now, it looks like a flat correction within an uptrend, as the 15-minute chart shows:

Concluding, the broad stock market extends short-term consolidation, as it trades slightly below its early July all-time high. There have been no confirmed uptrend reversal signals so far. However, a downward correction cannot be ruled out. Therefore, we remain neutral as there may be some more volatility following medium-term uptrend. We think that it is better to stay out of the market at this moment, just to avoid low risk/reward ratio trades. We will let you know when we think it is safe to get back in the market.

Due to a holiday break, beginning from this Friday until Monday, July 28, there will be no Stock Trading Alerts. We apologize for inconvenience.

Thank you.

Paul Rejczak
Stock Trading Strategist
Stock Trading Alerts