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 lost 0.5% on Tuesday, extending their short-term fluctuations along record levels as investors reacted to economic news releases. The S&P 500 index remains relatively close to last-week's all-time high of 2,119.59. The nearest important level of resistance is at around 2,115-2,120. On the other hand, support level is at 2,100, marked by previous resistance level. 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 negative, with index futures currently down 0.3%. The main European stock market indexes have been mixed so far. Investors will now wait for some economic data announcements: MBA Mortgage Index at 7:00 a.m., ADP Employment Change report at 8:15 a.m., ISM Services number at 10:00 a.m., Fed's Beige Book at 2:00 p.m. The S&P 500 futures contract (CFD) is in an intraday downtrend, as it retraces yesterday's late-session move up. The nearest important level of support is at 2,095-2,100. On the other hand, resistance level is at 2,105-2,110, among others, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract (CFD) follows a similar path as it trades slightly lower. The nearest important level of support is at around 4,430, marked by previous local lows. On the other hand, resistance level is at 4,450-4,460, as the 15-minute chart shows:

Concluding, the broad stock market retraced its Monday's move-up yesterday. 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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