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 between 0.3% and 0.6% on Wednesday, extending their recent move down as investors took short-term profits off the table. Our yesterday's negative intraday outlook has proved accurate. However, 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 2,085-2,090, marked by previous local extremes, among others. 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 slightly positive, with index futures currently up 0.1%. The main European stock market indexes have gained 0.3-0.6% so far. Investors will now wait for economic data announcements: Challenger Job Cuts number at 7:30 a.m., Initial Claims, Productivity at 8:30 a.m., Factory Orders at 10:00 a.m. The S&P 500 futures contract (CFD) trades within an intraday consolidation following yesterday's late-session rebound. The nearest important level of resistance remains at around 2,085-2,090. On the other hand, resistance level is at 2,100, 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 along the level of 4,445. The nearest important resistance level is at around 4,450-4,460, marked by recent local highs. On the other hand, support level is at 4,420-4,430, as the 15-minute chart shows:

Concluding, the broad stock market continued its short-term move down yesterday. 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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