Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,150 and profit target at 1,980, S&P 500 index)
Our intraday outlook is bearish, and our short-term outlook is bearish:
Intraday outlook (next 24 hours): bearish
Short-term outlook (next 1-2 weeks): bearish
Medium-term outlook (next 1-3 months): neutral
Long-term outlook (next year): bullish
The U.S. stock market indexes were mixed between -0.2% and +0.1% on Wednesday, as investors continued to hesitate following recent move up. The S&P 500 index has managed to reach yet another new all-time high at the level of 2,119.59, before closing slightly lower. The nearest important support level remains at around 2,000-2,010, marked by previous level of resistance. There have been no confirmed negative signals so far, however, we can see overbought conditions accompanied by negative divergences:
Expectations before the opening of today's tradin session are positive, with index future currently up 0.2%. The European stock market indexes have gained 0.1-0.2% so far. Investors will now wait for some economic data announcements: Consumer Price Index, Durable Orders at 8:30 a.m., FHFA Housing Price Index at 9:00 a.m. The S&P 500 futures contract (CFD) is in an intraday uptrend, as it retraces some of yesterday's move down. The nearest important level of resistance is at around 2,115-2,120, as we can see on the 15-minute chart:
The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it retraces some of yesterday's losses. The nearest important level of support is at 4,430. On the other hand, resistance level is at 4,450-4,460, as the 15-minute chart shows:
Concluding, the broad stock market reached another all-time high on Wednesday, before closing virtually flat. There have been no confirmed negative signals. However, we continue to maintain our speculative short position (S&P 500 index), as we expect a downward correction or an uptrend reversal. Stop-loss is at 2,150, and potential profit target is at 1,980. 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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