Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,210, and profit target at 2,050, S&P 500 index).

Our intraday outlook is bearish, and our short-term outlook is bearish. 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): bearish
Short-term outlook (next 1-2 weeks): bearish
Medium-term outlook (next 1-3 months): neutral
Long-term outlook (next year): neutral

The main U.S. stock market indexes were virtually flat on Monday, extending their short-term fluctuations, as investors continued to hesitate following June - July rally. The S&P 500 index remains close to its last Monday's new record high of 2,193.81. The nearest important level of resistance is at around 2,190-2,200. On the other hand, support level is at 2,165-2,170, marked by short-term local lows. The next support level  remains at 2,150. Will the market continue higher? Or is this some kind of a topping pattern before downward reversal? There have been no confirmed negative signals so far:

Expectations before the opening of today's trading session are positive, with index futures currently up 0.2%. The European stock market indexes have gained 0.5-0.8% so far. The S&P 500 futures contract trades within an intraday uptrend, as it gets closer to its last week's all-time high. The nearest important level of resistance is at around 2,190-2,200. On the other hand, support level remains at 2,170-2,180, marked by short-term local lows, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract follows a similar path, as it currently trades close its last week's all-time high. The nearest important level of resistance is at around 4,830-4,850. On the other hand, support level remains at 4,790-4,800, among others, as the 15-minute chart shows:

Concluding, the broad stock market extended its short-term fluctuations on Monday, as the S&P 500 index fluctuated along the level of 2,180. Will the uptrend continue towards 2,200 mark today? We still can see overbought conditions accompanied by negative technical divergences. Therefore, we continue to maintain our speculative short position (opened on July 18th at 2,162, S&P 500 index). Stop-loss level is at 2,210 and potential profit target is at 2,050 (S&P 500 index). 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