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 main U.S. stock market indexes gained between 0.7% and 1.6% on Wednesday, retracing their recent decline, as investors hoped for Greece bailout deal, among others. The S&P 500 index bounced off support level at 2,100. The nearest important level of resistance is at around 2,130-2,135, marked by May 20 all-time high of 2,134.72. There have been no confirmed negative signals so far. However, we still can see negative technical divergences:

Expectations before the opening of today's trading session are virtually flat, with index futures currently down 0.1%. The European stock market indexes have been mixed so far. Investors will now wait for some economic data announcements: Initial Claims at 8:30 a.m., Pending Home Sales at 10:00 a.m., Crude Inventories at 10:30 a.m. The S&P 500 futures contract (CFD) trades within an intraday consolidation following yesterday's advance. The nearest important level of resistance is at around 2,120-2,125, marked by local highs. On the other hand, support level is at 2,100, among others, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it fluctuates following yesterday's move up. The nearest important level of resistance is at 4,550, and support level is at 4,500, as we can see on the 15-minute chart:

Concluding, the broad stock market continues to fluctuate along its record level, as the S&P 500 index remains above 2,100 mark. 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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