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 between -0.3% and +0.5% on Friday, extending their short-term consolidation, as investors continued to hesitate following recent move up. However, the S&P 500 index has managed to reach yet another new all-time high at the level of 2,075.76, before closing down 0.3%. The nearest important resistance level is at around 2,085-2,100. On the other hand, level of support is at 2,060-2,065, marked by recent local lows, and the net support level is at 2,053.8-2,056.8, marked by November 21st daily gap up. There have been no confirmed negative signals so far, however, we can see overbought conditions accompanied by negative technical divergences:
Expectations before the opening of today’s trading session are negative, with index futures currently down 0.3-0.5%. The main European stock market indexes have lost 0.2-0.8% so far. Investors will now wait for the ISM Index announcement at 10:00 a.m. The S&P 500 futures contract (CFD) is in an intraday downtrend, as it trades closer to the support level of 2,050. The nearest important level of resistance is at around 2,060-2,065, marked by recent local lows, as we can see on the 15-minute chart:
The technology Nasdaq 100 futures contract (CFD) is relatively stronger, as it extends its short-term consolidation following recent rally. The nearest important level of resistance is at around 4,350, marked by long-term high, as the 15-minute chart shows:
Concluding, the broad stock market remains relatively close to its all-time high. 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
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