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 0.1-0.2% on Thursday, extending their short-term uncertainty, as investors reacted to some mixed economic data releases. The S&P 500 index remains relatively close to its May 20 all-time high of 2,134.72. The nearest important level of resistance is at around 2,130-2,135, and support level is at 2,100, among others. 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 0.2-0.3%. The main European stock market indexes have lost 0.1-1.0% so far. Investors will now wait for some economic data announcements: GDP - Second Estimate number at 8:30 a.m., Chicago PMI at 9:45 a.m., Michigan Sentiment at 10:00 a.m. The S&P 500 futures contract (CFD) trades within an intraday downtrend, as it retraces yesterday's rebound. The nearest important level of support is at around 2,110, and resistance level is at 2,120-2,125, marked by local highs, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it retraces yesterday's rebound. The nearest important level of resistance is at around 4,540-4,550. On the other hand, support level is at 4,500, among others, as the 15-minute chart shows:

Concluding, the broad stock market continues to fluctuate within a short-term consolidation. 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
Stock Trading Alerts