Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,030 and a profit target at 1,900, S&P 500 index)

Our intraday outlook is bearish, and our short-term outlook is bearish:

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 between 0.2% and 0.7% on Tuesday, extending their short-term move down, as investors continued to take profits following August-September rally. So, our yesterday’s bearish intraday outlook has proved quite accurate. The S&P 500 index remains below the level of 2,000, and less than two percent below Friday’s all-time high of 2,019.26. The nearest important level of resistance is at around 2,000-2,020. On the other hand, the support level is at 1,980-1,985, marked by previous local lows, as we can see on the daily chart:

Expectations before the opening of today’s session are positive, with index futures currently up 0.2%. The main European stock market indexes have been mixed so ar. Investors will now wait for some economic data announcements: MBA Mortgage Index at 7:00 a.m., New Home Sales at 10:00 a.m. The S&P 500 futures contract (CFD) is in a relatively narrow intraday trading range, as it bounces slightly following recent move down. The support level is at around 1,970, and the nearest important level of resistance is at 1,985-1,990, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract (CFD) is in a consolidation as it fluctuates along the level of 4,050. The nearest important support level is at around 4,030, and the level of resistance remains at 4,060. The market continues to trade close to previous local low:

Concluding, the broad stock market retraced its recent rally, as the S&P 500 index fell below the level of 2,000 once again. We remain bearish, expecting a downward correction or uptrend reversal. Therefore, we continue to maintain our already profitable speculative short position with entry point at 2,000.5 – S&P 500 index. The stop-loss is at the level of 2,030 and potential profit target is at 1,900 (S&P 500 index). It is always important to set some exit price level in case some events cause the price to move in the unlikely direction. Having safety measures in place helps limit potential losses while letting the gains grow.

Thank you.

Paul Rejczak
Stock Trading Strategist
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