Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,030 and 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 main U.S. stock market indexes lost 0.2-0.3% on Monday, extending their short-term fluctuations, as investors remained uncertain following some mixed economic data announcements. The S&P 500 index remains above the support level of 1,965, marked by recent local lows. On the other hand, the nearest important level of resistance is at around 1,980-1,985, marked by previous support level. The market trades close to its June-July consolidation, as we can see on the daily chart:
Expectations before the opening of today’s session are positive, with index futures currently up 0.3-0.4%. The European stock market indexes have been mixed so far. Investors will now wait for series of economic data releases: Case-Shiller 20-city Index at 9:00 a.m., Chicago PMI at 9:45 a.m., Consumer Confidence at 10:00 a.m. The S&P 500 futures contract (CFD) is in an intraday uptrend, however, it remains within short-term consolidation. The resistance level is at around 1,980-1,990, as the 15-minute chart shows:
The technology Nasdaq 100 futures contract (CFD) bounced off the support level of 4,000. It currently trades along the level of 4,050. The level of resistance is at around 4,080-4,100, among others:
Concluding, the broad stock market fluctuates following last week’s move down. There is no clear short-term direction. 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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