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 0.6% and 1.4% on Thursday, extending their short-term fluctuations, as investors reacted to unprecedented Swiss National Bank decision to scrap their euro peg, among others. The S&P 500 index fell below the level of 2,000. However, the nearest important support level remains at around 1,990-2,000. On the other hand, resistance level is at 2,020, marked by recent local highs, as we can see on the daily chart:
Expectations before the opening of today’s trading session are negative, with index futures currently down 0.1-0.5%. The main European stock market indexes have been mixed so far. Investors will now wait for some economic data announcements: Consumer Price Index at 8:30 a.m., Industrial Production, Capacity Utilization at 9:15 a.m., Michigan Sentiment number at 9:55 a.m. The S&P 500 futures contract (CFD) is in an intraday consolidation, following yesterday’s move down. The nearest important support level is at 1,970, and resistance level remains at 1,990-2,000, as the 15-minute chart shows:
The technology Nasdaq 100 futures contract (CFD) fluctuates along the level of 4,050, following yesterday’s decline. The nearest important level of resistance is at 4,080-4,100, marked by previous support level:
Concluding, the broad stock market extended its short-term consolidation yesterday, as the S&P 500 index fluctuated along the level of 2,000. There is still no clear short-term direction, however we can see some potential weakness. 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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