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 lost 0.6-0.8% on Monday, as investors took profits following October-November move up. Our yesterday’s bearish intraday outlook has proved accurate. The S&P 500 index trades close to its early December local low. The nearest important support level is at around 2,050-2,055, and the next level of support is at 2,040, marked by some previous local lows. On the other hand, resistance level remains at around 2,070-2,080, marked by an all-time high of 2,079.47, among others, as we can see on the daily chart:
Expectations before the opening of today’s trading session are negative, with index futures currently down 0.3-0.4%. The main European stock market indexes have lost between 0.8% and 1.2% so far. Investors will now wait for some economic data announcements: Wholesale Inventories, JOLTS – Job Openings at 10:00 a.m. The S&P 500 futures contract (CFD) is in an intraday downtrend, as it trades along the level of 2,050. The nearest important level of resistance is at around 2,055-2,066, marked by local highs, as the 15-minute chart shows:
The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it trades close to yesterday’s local low. The nearest important level of support is at around 4,250, and resistance level remains at around 4,290-4,300, among others:
Concluding, the broad stock market retraced its recent move up, as the S&P 500 index bounced off resistance level at 2,070-2,080, marked by last week’s 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
Stock Trading Alerts
