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

Our intraday outlook remains neutral, and our short-term outlook is neutral:

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

The U.S. stock market indexes lost between 0.8% and 1.2% on Tuesday, extending their sell-off, as investors reacted to some further oil prices decline, among others. The S&P 500 index has retraced most of its December rally, which is negative. The nearest important support level is at around 1,970-1,980, marked by previous local lows. For now, it looks like a volatile consolidation following last year’s October-November move up, as we can see on the daily chart:

Expectations before the opening of today’s trading session are positive, with index futures currently up 0.3-0.4%. The main European stock market indexes have gained 0.3-0.5% so far. Investors will now wait for some economic data announcements: ADP Employment Change report at 8:15 a.m., Trade Balance at 8:30 a.m., FOMC Minutes at 2:00 p.m. The S&P 500 futures contract (CFD) fluctuates following yesterday’s move down. The nearest important resistance level is at around 2,010. On the other hand, support level is at 1,980-1,990, marked by yesterday’s local low, among others:

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it trades along the level of 4,100 this morning. The nearest important level of support is at around 4,080-4,100, as the 15-minute hart shows:

Concluding, the broad stock market extended its sell-off on Tuesday, as investors reacted to further oil prices crash. For now, it looks like a volatile medium-term consolidation following last year’s October-November rally. 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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