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 main U.S. stock market indexes were virtually flat on Tuesday, extending their short-term uncertainty, as investors hesitated ahead of a long holiday weekend. The S&P 500 index has managed to reach yet another new all-time high at the level of 2,074.21, before closing 0.1% lower. The nearest important resistance level is at around 2,085-2,100. On the other hand, support level is at 2,050-2,055, marked by previous level of resistance. The next important support level is at around 2,040. There have been no confirmed negative signals so far, however, we can see overbought conditions accompanied by negative divergences:

Expectations before the opening of today’s trading session are slightly positive, with index futures currently up 0.1-0.2%. The European stock market indexes have been mixed so far. Investors will now wait for series of economic data announcements: Initial Claims, Durable Orders, Personal Income, Personal Spending, PCE Prices-Core number at 8:30 a.m., Chicago PMI at 9:45 a.m., Michigan Sentiment at 9:55 a.m., New Home Sales, Pending Home Sales at 10:00 a.m. The S&P 500 futures contract (CFD) trades close to all-time high, as it continues to move along the level of 2,070. The nearest important resistance level is at around 2,070-2,075, and support level remains at 2,060-2,065, marked by recent local low, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract (CFD) remains close to its long-term high, as it moves along the level of 4,300. The nearest important level of support is at around 4,280, marked by yesterday’s local low, as the 15-minute chart shows:

Concluding, the broad stock market is in a short-term consolidation, as it moves along record highs. There have been no confirmed negative signals so far. However, we still 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