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 U.S. stock market indexes were mixed between -0.3% and +0.1% on Tuesday, extending their fluctuations as investors continued to hesitate following recent move down. The S&P 500 index remains above its level of support at 1,965, marked by local lows. On the other hand, the nearest important resistance level is at around 1,980-1,985, marked by previous support level. The market extends its short-term consolidation. For now, it looks like a flat correction within a downtrend, as we can see on the daily chart:

Expectations before the opening of today’s session are virtually flat. The main European stock market indexes have been mixed so far. Investors will now wait for some economic data announcements: ADP Employment Change report at 8:15 a.m., ISM Index, Construction Spending at 10:00 a.m. The S&P 500 futures contract (CFD) extends its short-term consolidation, as it trades along the level of support at 1,955-1,960. On the other hand, the resistance level is at around 1,975-1,980, marked by recent local highs, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract (CFD) is in a relatively narrow intraday trading range, extending short-term consolidation. The level of resistance is at around 4,050-4,060, and the nearest important support level remains at 4,000. For now, it looks like an upward correction within a short-term downtrend:

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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