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 main U.S. stock market indexes lost between 0.5% and 1.0% on Monday, extending Friday’s move down, as investors reacted to further oil prices crash, among others. The S&P 500 index tested support level at around 2,020-2,030. The next important level of support remains at around 1,990-2,000, marked by recent local lows. On the other hand, level of resistance is at 2,060-2,065, marked by local highs, as we can see on the daily chart:

Expectations before the opening of today’s trading session are positive, with index futures currently up 0.4%. The European stock market indexes have gained 0.6-0.9% so far. The S&P 500 futures contract (CFD) is in an intraday uptrend, following yesterday’s move down. The nearest important support level is at around 2,015-2,020, marked by recent local lows. On the other hand, resistance level is at 2,040-2,050, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract (CFD) retraced some of yesterday’s losses, as it bounced off support level at around 4,150. The nearest important level of resistance is at 4,200-4,220. For now, it looks like an upward correction within a short-term downtrend, however, a positive downtrend reversal scenario cannot be excluded here:

Concluding, the broad stock market extended its recent move down as investors reacted to further oil prices sell-off, among others. 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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