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 0.5% on Tuesday, extending their recent move up, as investors remained optimistic ahead of economic data announcements, Fed’s Jackson Hole conference, among others. The S&P 500 got closer to its July 24 all-time high of 1,991.39. The nearest important level of resistance is at around 1,990-2,000. On the other hand, the support level is at 1,960-1,970. There have been no confirmed negative signals so far. However, we can see some overbought conditions, accompanied by negative technical divergences. Divergences occur when the price and momentum indicators move in opposite directions. Negative divergence happens when the price makes new higher high, but the indicator fails to do the same. Actually, there are some negative price - momentum divergences, as we can see on the daily chart:

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 lost 0.3-0.5% so far. Investors will now wait for the FOMC  Minutes announcement at 2:00 p.m. The S&P 500 futures contract (CFD) is in a relatively narrow intraday trading range, as it fluctuates along the level of 1,975. The nearest important resistance level is at around 1,980, and the level of support is at 1,960, marked by recent local extremes, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract (CFD) trades close to its new long-term highs, above the level of 4,000. There have been no confirmed negative signals so far. The nearest important support level is at around 4,000, and a potential level of resistance is at 4,040:

Concluding, the broad stock market remains in a short-term uptrend, extending its recent move up. However, there are some overbought conditions which may lead to a downward correction. 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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