Briefly: In our opinion, speculative short positions are favored (with stop-loss at 1,985 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 lost between 0.1% and 0.3% on Monday, retracing some of their recent rebound, as investors took short-term profits. The S&P 500 index trades slightly below the resistance level of 1,985-1,990, marked by late September consolidation, among others. On the other hand, the level of support remains at around 1,950-1,960, and the next support level is at 1,920-1,930, marked by the early August bottoming consolidation. For now, it looks like a correction within a downtrend. There have been no confirmed positive signal so far, as we can see on the daily chart:

Expectations before the opening of today’s session are negative, with index futures currently down 0.5%. The main European stock market indexes have lost 0.7-1.0% so far. The S&P 500 futures contract (CFD) is in an intraday downtrend, as it trades below yesterday’s low. The resistance level remains at around 1,970, marked by yesterday’s high, and the nearest important level of support is at 1,935-1,945, marked by previous consolidation, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract (CFD) is in a similar intraday downtrend, as it trades below Monday’s lows. The nearest important resistance level is at 4,000, and the level of support remains at around 3,970, marked by previous consolidation:

Concluding, the broad stock market bounced off following its recent losses. However, it may continue short-term downtrend as there have been no confirmed trend reversal signals so far. We remain bearish, expecting some more downside. 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 1,985. Potential profit target remains 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
Stock Trading Alerts