Briefly: In our opinion, no speculative positions are justified.

Our intraday outlook is neutral, and our short-term outlook is neutral. Our medium-term outlook is now neutral, following S&P 500 index breakout above last year's all-time high:

Intraday outlook (next 24 hours): neutral
Short-term outlook (next 1-2 weeks): neutral
Medium-term outlook (next 1-3 months): neutral
Long-term outlook (next year): neutral

The U.S. stock market indexes gained 0.5-0.7% on Thursday, extending their short-term uptrend, as investors' sentiment remained bullish following recent rally. The S&P 500 index has reached yet another new all-time high at the level of 2,168.99. The nearest important level of support is at around 2,130-2,135, marked by previous level of resistance (S&P 500 index). The next important level of support is at around 2,100-2,120. On the other hand, potential level of resistance is at 2,200 mark. There have been no confirmed negative signals so far. However, we can see some short-term overbought conditions accompanied by negative technical divergences:

Expectations before the opening of today's trading session are virtually flat. The European stock market indexes have lost 0.1-0.5% so far. Investors will now wait for series of economic data announcements: Consumer Price Index, Retail Sales, Empire Manufacturing at 8:30 a.m., Industrial Production, Capacity Utilization at 9:15 a.m., Business Inventories, Michigan Sentiment number at 10:00 a.m. The S&P 500 futures contract trades within an intraday consolidation, as it fluctuates along the level of 2,150-2,160. The nearest important level of resistance is at around 2,160-2,165, marked by recent all-time high. On the other hand, support level is at 2,140-2,150. There have been no confirmed negative signals so far. However, there are some technical overbought conditions, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract follows a similar path, as it currently trades within an intraday consolidation along the level of 4,580. The nearest important level of resistance is at around 4,600-4,610. On the other hand, support level remains at 4,550-4,570, marked by short-term consolidation, as the 15-minute chart shows:

Concluding, the broad stock market extended its rally yesterday, as investors' sentiment remained bullish. We still can see short-term overbought conditions accompanied by bearish technical divergences. However, there have been no confirmed negative signals so far. Our speculative short position has been closed on Monday, at stop-loss level of 2,140 (S&P 500 index). We lost 48 index points on that trade, betting against strong short-term uptrend off late June local low at around 2,000. 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. Currently, we prefer to be out of the market, 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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