Briefly: In our opinion, speculative short positions are favored (with stop-loss at 1,975 and profit target at 1,875, 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 were virtually flat on Monday, as investors took some profits following recent move up. The S&P 500 index remains within its late September – early October consolidation, testing the resistance level of 1,970-1,980. On the other hand, the level of support is at 1,930-1,950, among others, as we can see on the daily chart:
Expectations before the opening of today’s trading session are positive, with index futures currently up 0.4-0.6%. The European stock market indexes have gained 0.5-1.0% so far. Investors will now wait for some economic data announcements: Durable Orders at 8:30 a.m., Case-Shiller 20-city Index at 9:00 a.m., Consumer Confidence at 10:00 a.m. The S&P 500 futures contract (CFD) is in an intraday uptrend, as it trades close to the level of 1,970. The nearest important support level remains at around 1,940-1,950:
The technology Nasdaq 100 futures contract (CFD) broke above the resistance level of 4,050. The nearest important level of support remains at around 4,000-4,020, marked by previous local extremes, as the 15-minute chart shows:
Concluding, the broad stock market fluctuated following recent move up, as investors took some profits. The S&P 500 index is within its late September – early October consolidation, as it tests resistance level. We continue to maintain our speculative short position. Stop-loss level is at 1,975, and potential profit target is at 1,875 (S&P 500 index). It is important to set some exit price level in case some events cause the price to move in an unlikely direction. Having safety measures in place helps limit potential losses while letting gains grow.
Thank you.
Paul Rejczak
Stock Trading Strategist
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