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 lost 0.8-0.9% on Tuesday, extending their recent move down, as investors reacted to some geopolitical news concerning Russia-Ukraine conflict, among others. Our yesterday’s bearish intraday outlook has proved accurate. The S&P 500 index continues to fluctuate following last week’s sell-off. The nearest important level of support is at 1,900-1,920. On the other hand, the resistance level is at around 1,940-1,950, marked by recent local highs. There have been no confirmed positive signals so far. For now, it looks like a flat correction within a short-term downtrend:
Expectations before the opening of today’s session are negative, with index futures currently down 0.4%. The main European stock market indexes have lost 1.1-1.4% so far. Investors will now wait for the U.S. Trade Balance announcement at 8:30 a.m. The S&P 500 futures contract (CFD) is in an intraday downtrend, as it remains close to its new short-term low. The nearest important support level is at around 1,900, and the level of resistance is at 1,930-1,935, among others:
The technology Nasdaq 100 futures contract (CFD) extends its recent trading range, as it fluctuates slightly above the support level of 3,850. The nearest important level of resistance is at around 3,900, as we can see on the 15-minute chart:
Concluding, the broad stock market remains in a short term downtrend, slightly extending its recent decline. We continue to maintain our already profitable speculative short position. The stop-loss is at 1,970 and our profit target is at 1,850 (S&P 500 index). It is important to set some exit price level in case your opinion is wrong or your trading method fails at some point in time.
Thank you.
Paul Rejczak
Stock Trading Strategist
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