Briefly: In our opinion, speculative short positions are favored (with stop-loss at 1,970 and a profit target at 1,850, S&P 500 index)
Our intraday outlook is bearish, and our short-term outlook is bearish, following a breakout below recent consolidation:
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
The U.S. stock market indexes gained 0.5-0.8% on Monday, retracing some of their recent decline, as investors hunted for bargains. The S&P 500 index bounced off the support level at around 1,915-1,920, marked by the early June local lows. The next support level is at 1,900. On the other hand, the nearest important level of resistance seems to be at 1,940-1,950, marked by previous local lows. For now, it looks like a relatively flat correction within a short-term downtrend. There have been no confirmed positive signals so far:
Expectations before the opening of today’s session are slightly negative, with index futures currently down 0.1-0.2%. The main European stock market indexes have gained between 0.4% and 0.8% so far. Investors will now wait for some economic data announcements: Factory Orders, ISM Services at 10:00 a.m. The S&P 500 futures contract (CFD) extends yesterday’s consolidation, as it trades along the level of 1,930. The nearest important resistance level is at 1,930-1,935, and the level of support remains at 1,910-1,920. For now, it looks like a flat correction within a short-term downtrend, as we can see on the 15-minute chart:
The technology Nasdaq 100 futures contract (CFD) followed a similar path, as it bounced off the support level of 3,850. The resistance level is at around 3,900-3,920. There have been no confirmed short-term positive signals so far:
Concluding, the broad stock market is in a consolidation following last week’s decline. We continue to maintain our speculative short position, expecting some more downside, as these short-term fluctuations may lead to breakdown below support levels. It is always important to set some exit price level in case your opinion is wrong or your trading method fails at some point in time. So, our stop-loss remains at 1,970, and our profit target is at 1,850 (S&P 500 index).
Thank you.
Paul Rejczak
Stock Trading Strategist
Stock Trading Alerts
