Briefly: In our opinion, no speculative positions are justified
Our intraday outlook is neutral, and our short-term outlook is neutral:
Intraday outlook (next 24 hours): neutral
Short-term outlook (next 1-2 weeks): neutral
Medium-term outlook (next 1-3 months): bearish
Long-term outlook (next year): bullish
The main U.S. stock market indexes gained between 2.3% and 2.5% on Thursday, as investors continued their buying of stocks following recent sharp sell-off. The S&P 500 index bounced off support level of 1,850-1,900. The nearest important level of resistance is at 1,980-2,000. On the other hand, the nearest important level of support is at around 1,950, marked by local highs. There have been no confirmed positive signals so far. For now, it looks like an upward correction within a short-term downtrend:
Expectations before the opening of today's trading session are negative, with index futures currently down 0.6-0.7%. The European stock market indexes have lost 0.1-0.5% so far. Investors will now wait for some economic data announcements: Personal Income, Personal Spending, PCE Prices - Core number at 8:30 a.m., Michigan Sentiment at 10:00 a.m. The S&P 500 futures contract (CFD) trades within an intraday consolidation, following recent move up. The nearest important level of resistance is at around 1,990-2,000, and support level is at 1,930-1,950, among others, as the 15-minute chart shows:
The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it trades along the level of 4,300. The nearest important level of resistance is at around 4,230-4,250, marked by yesterday's local high. On the other hand, support level is at 4,200-4,250, as we can see on the 15-minute chart:
Concluding, the broad stock market retraced some more of its recent move down yesterday. For now, it looks like a correction within a short-term downtrend. Our late April's short position's (2,098.27, S&P 500 index) profit target has been reached at the level of 1,980. Overall, we gained almost 120 index points on that pre-planned trade. We prefer to be out of the market at this moment, avoiding low risk/reward ratio trades. We will let you know when we think it is safe to get back in the market.
Thank you.
Paul Rejczak
Stock Trading Strategist
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