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 0.1-0.2% on Thursday, extending their short-term fluctuations, as investors remained uncertain ahead of today's monthly jobs report release, among others. The S&P 500 index continues to fluctuate along the level of 2,100. The nearest important resistance level is at around 2,115-2,120, marked by February 25 all-time high of 2,119.59. On the other hand, level of support remains at 2,08-2,090, marked by previous local lows. There have been no confirmed negative signals so far. However, we still can see some overbought conditions accompanied by negative divergences:
Expectations before the opening of today's trading sesion are virtually flat. The main European stock market indexes have been mixed so far. Investors will now wait for some important economic data announcements: Nonfarm Payrolls, Unemployment Rate, Trade Balance at 8:30 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 is at around 2,100-2,150, as we can see on the 15-minute chart:
The technology Nasdaq 100 futures contract (CFD) is within a similar intraday consolidation, as it trades along the level of 4,450. The nearest important resistance level is at 4,460-4,465. On the other hand, support level is at 4,430, as the 15-minute chart shows:
Concluding, the broad stock market extended its short-term consolidation on Thursday. 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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