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 gained between 0.4% and 0.6% on Tuesday, retracing Monday’s move down, as investors reacted to some better-than-expected economic data announcements. The S&P 500 index bounced off the support level at around 2,050, marked by November 21st daily gap up of 2,053.8-2,056.8, among others. The next important level of support remains at 2,040, marked by previous local lows. On the other hand, the nearest important resistance level is at 2,070-2,075, marked by an all-time high of 2,075.76, among others. There have been no confirmed negative signals so far, however, we still can see overbought conditions accompanied by negative divergences:
Expectations before the opening of today’s trading session are virtually flat, with index futures currently down 0.1%. The main European stock market indexes have been mixed so far. Investors will now wait for series of economic data announcements: ADP Employment Change report at 8:15 a.m., Productivity at 8:30 a.m., ISM Services number at 10:00 a.m., Fed’s Beige Book at 2:00 p.m. The S&P 500 futures contract (CFD) trades relatively close to its all-time high, as it moves along the level of 2,065. The nearest important level of resistance is at around 2,065-2,075, as we can see on the 15-minute chart:
The technology Nasdaq 100 futures contract (CFD) continues to fluctuate along the level of 4,300. Level of resistance remains at around 4,330-4,350, marked by long-term high. On the other hand, the nearest important support level is at 4,280-4,300, as the 15-minute chart shows:
Concluding, the broad stock market retraced its recent decline, as it extended a short-term consolidation. 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
