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 between 0.6% and 1.0% on Monday, extending their short-term downtrend, as investors continued to worry about the outlook for global economy. Our yesterday’s bearish intraday outlook has proved accurate. The S&P 500 index broke below the level of 2,000, which is negative. The nearest important level of resistance is at around 2,000-2,020, marked by recent local highs. On the other hand, potential support level is at 1,965, marked by some previous local extremes, among others. There have been no confirmed positive signals so far, as we can see on the daily chart:
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 gained 0.3-0.8% so far. Investors will now wait for some economic data announcements: Housing Starts, Building Permits at 8:30 a.m. The S&P 500 futures contract (CFD) bounced off support level at around 1,980. It trades slightly below the level of 2,000. The next important level of resistance is at 2,015-2,020, marked by recent local highs, as we can see on the 15-minute chart:
The technology Nasdaq 100 futures contract (CFD) is in an intraday consolidation, as it trades along the level of 4,170. The nearest important support level is at around 4,140-4,150, marked by recent local lows, and resistance level remains at 4,200, among others:
Concluding, the broad stock market extended its short-term downtrend, as the S&P 500 index broke below the level of 2,000. We continue to maintain our already profitable short position with entry point at 2,038 (November 12th opening price of the S&P 500 index). 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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