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 gained between 0.6% and 1.0% on Monday, retracing their recent move down, as investors reacted to some economic data announcements. The S&P 500 index got closer to its last week's all-time high of 2,119.59. The nearest important level of resistance is at around 2,120. 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. The S&P 500 futures contract (CFD) is in an intraday consolidation, following yesterday's move up. The nearest important resistance level is at around 2,1150-2,120. On the other hand, support level remains at 2,100, marked by recent local lows as we can see on the 15-minute chart:
The technology Nasdaq 100 futures contract (CFD) is follows a similar path as it fluctuates along the level of 4,475. The nearest important resistance level is at around 4,500. On the other hand, level of support is at 4,455-4,460, marked by previous local highs, as the 15-minute chart shows:
Concluding, the broad stock market retraced its recent move down on Monday. There have been no confirmed negative signals. However, we continue to maintain our speculative short position (S&P 500 index), as we expect downward correction or an uptrend reversal. Stop-loss is at 2,150, and potential profit target is at 1,980. You can trade S&P 500 index using futures contracts (S&P 500 futures contract - SP, E-mini S&P 500 futures contract - ES) or an ETF like the SPDR S&P 500 ETF - SPY. 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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