Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,140, 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 U.S. stock market indexes gained 0.4-0.5% on Thursday, retracing some of their recent decline, as investors reacted to economic data releases. The S&P 500 index bounced off support level at around 2,070-2,080, marked by previous local lows. On the other hand, level of resistance is at 2,100, among others. There have been no confirmed negative signals so far, however, we can see negative technical divergences:
Expectations before the opening of today's trading session are virtually flat, with index futures currently up 0.1%. The main European stock market indexes have gained 0.5-1.7% so far. Investors will now wait for the economic data announcements: Nonfarm Payrolls, Unemployment Rate at 8:30 a.m., Wholesale Inventories at 10:00 a.m. The S&P 500 futures contract (CFD) trades within an intraday consolidation, following yesterday's rebound. The nearest important level of resistance is at 2,090-2,100, and support level remains at 2,080, among others, as the 15-minute chart shows:
The technology Nasdaq 100 futures contract (CFD) fluctuates along the level of 4,400, following yesterday's move up. The nearest important resistance level is at around 4,420, and support level is at 4,390, as we can see on the 15-minute chart:
Concluding, the S&P 500 index rebounded yesterday, as it retraced some of its recent move down. We continue to maintain our speculative short position (2,098.27, S&P 500 index), as we expect a downward correction or an uptrend reversal. Stop-loss is at 2,140, 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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