Briefly: In our opinion, no speculative positions are justified.
Our intraday outlook is 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 0.8-1.1% on Monday, extending their recent move up as investors’ sentiment further improved. The S&P 500 index got closer to its July 24 all-time high of 1,991.39, closing above Fibonacci’s 61.8% retracement of the late July – early August sell-off at 1,958.3. the nearest important resistance level is at around 1,990-2,000, and the level of support is at around 1,940-1,950, marked by some of the previous resistance levels. The market is back within July’s month-long consolidation, as we can see on the daily chart:
Expectations before the opening of today’s session are slightly positive, with index futures currently up 0.2%. The main European stock market indexes have gained 0.4-1.0% so far. Investors will now wait for some economic data announcements: Consumer Price Index, Housing Starts and Building permits at 8:30 a.m. The consumer inflation is expected to remain relatively flat, supporting Fed’s easy monetary policy. The S&P 500 futures contract (CFD) is in an intraday uptrend, as it is close to the resistance level at around 1,975. On the other hand, the nearest important level of support is at around 1,960, marked by recent local high, as the 15-minute chart shows:
The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it trades above the level of 4,000. There have been no confirmed negative signals so far. The nearest important level of support is at 3,980-4,000, marked by recent local extremes:
Concluding, the broad stock market extended its move up, as the S&P 500 index crossed the level of our stop-loss at 1,970. In our opinion, no speculative positions are justified at this moment. We prefer to be out of the market, avoiding low risk/reward ratio trades. We will let you know when we think it is safe to get back in the market.
Thank you.
Paul Rejczak
Stock Trading Strategist
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