Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,140, 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 0.1-0.3% on Friday, extending their short-term fluctuations, as investors continued to take profits off the table. The S&P 500 index remains relatively close to May 20 all-time high of 2,134.72. The nearest important level of resistance is at around 2,130-2,135. On the other hand, support level is at 2,120-2,125, marked by recent local lows. There have been no confirmed negative signals so far. However, we can see negative technical divergences:

Expectations before the opening of today's trading session are negative, with index futures currently down 0.3-0.4%. The main European stock market indexes have lost 0.1-0.5% so far. Investors will now wait for series of economic data announcements: Durable Orders at 8:30 a.m., Case-Shiller 20-city Index, FHFA Housing Price Index at 9:00 a.m., New Home Sales, Consumer Confidence number at 10:00 a.m. The S&P 500 futures contract (CFD) trades within an intraday downtrend, as it retraces some of last week's move up. The nearest important level of resistance is at 2,120-2,125, and support level is at 2,110-2,115, among others, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it retraces last week's move up. The nearest important level of support is at around 4,500. On the other hand, resistance level is at 4,520, as we can see on the 15-minute chart:

Concluding, the broad stock market extended its short-term consolidation on Friday. There have been no confirmed negative signals so far. However, we continue to maintain our speculative short position (2,098.27, S&P 500 index), as we expect a downward correction or an uptrend reversal. Stop-loss is at 2,140, 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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