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 0.9-1.2% on Tuesday, retracing some of their recent move down, as investors reacted to quarterly corporate earnings releases, among others. The S&P 500 index bounced off support level at around 2,060. The nearest important level of resistance is at 2,100. There have been no confirmed medium-term negative signals so far, however, we still can see negative divergences:
Expectations before the opening of today's trading session are positive, with index futures currently up 0.2%. The main European stock market indexes have been mixed so far. Investors will now wait for some economic data announcements: Pending Home Sales at 10:00 a.m., Crude Inventories at 10:30 a.m., FOMC Rate Decision release at 2:00 p.m. The S&P 500 futures contract (CFD) is in an intraday uptrend, as it extends yesterday's move up. The nearest important level of resistance is at 2,090-2,100, and support level is at 2,070-2,080, as the 15-minute chart shows:
The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it extends its yesterday's advance. The nearest important level of resistance is at 4,580-4,600, marked by previous local lows. On the other hand, support level is at 4,550, among others, as we an see on the 15-minute chart:
Concluding, the broad stock market retraced some of its recent decline yesterday. There have been no confirmed medium-term negative signals so far. However, we continue to maintain our speculative short position (2,098.27, S&P 500 index), as we expect a medium-term 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
Stock Trading Alerts
