Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,085 and profit target at 1,950, 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 on Thursday, following a volatile trading session, as investors’ uncertainty extended. However, the S&P 500 index has managed to reach yet another new all-time high at the level of 2,046.18. The nearest important resistance level remains at around 2,050. On the other hand, the level of support is at 2,020-2,025, marked by previous local extremes. There have been no confirmed negative signals so far, however, we can see overbought conditions which may lead to a correction:

Expectations before the opening of today’s trading session are slightly positive, with index futures currently up 0.1-0.2%. The main European stock market indexes have been mixed so far. Investors will now wait for some economic data announcements: Retail Sales at 8:30 a.m., Michigan Sentiment at 9:55 a.m., Business Inventories at 10:00 a.m. The S&P 500 futures contract (CFD) extends its short-term consolidation, as it moves along the level of 2,035. The nearest important resistance level is at 2,040-2,050, and support level remains at 2,025-2,030, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract (CFD) trades close to its new long-term highs, as it remains above the level of 4,200. The nearest important level of support is at 4,180-4,200, marked by previous resistance level. There have been no confirmed negative signals so far, however, we can see short-term overbought conditions:

Concluding, the broad stock market remains close to all-time highs, as it extends recent fluctuations. We expect a downward correction or an uptrend reversal. Therefore, we continue to maintain our speculative short position. Stop-loss is at 2,085 and potential profit target is at 1,950 (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