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 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 lost 0.8-1.1% on Thursday, retracing their recent move up, as investors took short-term profits off the table. The S&P 500 index continues to trade along its July - August consolidation, following the early September decline. The nearest important level of resistance is at around 2,160, marked by Monday's daily gap down of 2,158.54-2,163.97. The next important level of resistance is at around 2,170, marked by previous daily gap down, among others. On the other hand, support level is at around 2,120-2,140, marked by local lows. The market trades within a correction following recent rally. Will it continue its uptrend? Or is this some topping pattern before downward reversal?

Expectations before the opening of today's trading session are slightly negative, with index futures currently down 0.1-0.2%. The European stock market indexes have lost 1.0-1.4% so far. Investors will now wait for series of economic data announcements: Personal Income, Personal Spending, Core PCE Prices number at 8:30 a.m., Chicago PMI at 9:45 a.m., Michigan Sentiment - Final at 10:00 a.m. The S&P 500 futures contract trades within an intraday consolidation following yesterday's move down. The nearest important level of support is at around 2,135, marked by local lows. The next support level is at 2,120-2,130. On the other hand, resistance level is at 2,150, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract remains relatively stronger than the broad stock market, as it is still close to its last week's new all-time high. It trades within an intraday consolidation along the level of 4,830. The nearest important support level is at around 4,800-4,820, marked by local lows. The nearest important resistance level is at 4,840-4,850, among others, as the 15-minute chart shows:

Concluding, the broad stock market retraced its recent move up yesterday, as investors reacted to economic data releases, among others. The S&P 500 index extends its short-term consolidation. 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
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