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 between 0.1% and 0.4% on Monday, extending their last week's move up, as investors reacted to economic data releases, among others. The S&P 500 index has reached a new all-time high of 2,131.78. The nearest important level of support is at around 2,120-2,125, marked by recent resistance level. There have been no confirmed negative signals so far. However, we still can see negative technical divergences:

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 0.3-1.8% so far. Investors will now wait for the Housing Starts and Building Permits data release at 8:30 a.m. The S&P 500 futures contract (CFD) trades within an intraday uptrend, following yesterday's advance. The nearest important level of resistance is at around 2,130-2,135, and support level is at 2,120, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it extends its short-term move up. However, it remains slightly below its long-term high. The nearest important level of resistance is at around 4,530-4,560. On the other hand, support level is at 4,490-4,500, as we can see on the 15-minute chart:

Concluding, the broad stock market extended its short-term uptrend on Friday, as the S&P 500 index reached new record high above the level of 2,130. There have been no confirmed negative signals so far. However, 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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