Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,090 and profit target at 1,980, S&P 500 index)

Our intraday outlook is bearish, and our short-term outlook is bearish:

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): bullish

The main U.S. stock market indexes gained between 0.7% and 1.5% on Thursday, retracing some of their recent decline, as investors reacted to mixed economic data announcements. The S&P 500 index bounced off support level at around 2,040, marked by early February local lows, among others. On the other hand, resistance level is at 2,065-2,070 and the next level of resistance is at 2,080-2,085. For now, it looks like an upward correction within a short-term downtrend:

Expectations before the opening of today's trading session are virtually flat, with index futures currently down 0.1%. The European stock market indexes have lost 0.1-0.2% so far. Investors will now wait for some economic data announcements: Producer Price Index at 8:30 a.m., Michigan Sentiment at 10:00 a.m. The S&P 500 futures contract (CFD) trades within an intraday consolidation, following yesterday's move up. The nearest important level of resistance is at around 2,065-2,070, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract (CFD) trades within a similar intraday consolidation, as it moves along the level of 4,330. The nearest important level of support is at around 4,320-4,330, and resistance level is at 4,440-4,450. For now, it looks like a an upward correction following recent sell-off:

Concluding, the broad stock market retraced some of its recent move down. It looks like an upward correction within a short-term downtrend. Therefore, we continue to maintain our speculative short position (opened on February 18 at 2,099.16, S&P 500 index), as we expect some more downside. Stop-loss level is at 2,090 (S&P 500 index) and potential profit target is at 1,980. 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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