Briefly: In our opinion, no speculative positions are justified.
Our intraday outlook is now neutral, and our short-term outlook is neutral:
Intraday
(next 24 hours) outlook: neutral
Short-term (next 1-2 weeks) outlook: neutral
Medium-term (next 1-3 months) outlook: neutral
Long-term outlook (next year): bullish
The main U.S. stock market indexes gained 2.4-2.5% on Thursday, extending their short-term rally, as investors remained bullish following Wednesday’s FOMC Rate Decision release. The S&P 500 index retraced most of its recent decline, as it got closer to its December 5th all-time high of 2,079.47. The nearest important level of resistance is at around 2,070-2,080, marked by the record high, among others. On the other hand, support level is at around 2,020, marked by yesterday’s daily gap up of 2,016.8-2,019.0, as we can see on the daily chart:
Expectations before the opening of today’s trading session are positive, with index futures currently up 0.3-0.5%. The European stock market indexes have been mixed so far. The S&P 500 futures contract (CFD) is in an intraday consolidation, following recent rally. The nearest important resistance level is at around 2,070. On the other hand, level of support is at 2,030-2,050, among others, as the 15-minute chart shows:
The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it fluctuates after its recent move up. There have been no confirmed negative signals so far, however, we can see some short-term overbought conditions which may lead to a downward correction at some point in time:
Concluding, the broad stock market continued its rally, retracing most of the earlier sell-off. Our speculative short position was closed at the open of yesterday’s trading session, according to a stop-loss level of 2,025 - S&P 500 index. It has been profitable (with entry point at 2,038, S&P 500 index). We prefer to be out of the market, avoiding low risk/reward ratio trades. We will let you know when we think it is safe to get back in the market.
Thank you.
Paul Rejczak
Stock Trading Strategist
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