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 lost 0.2-0.5% on Tuesday, extending their short-term fluctuations as investors reacted to mixed housing data releases. The S&P 500 index continues to trade along the level of 2,100. The nearest important level of resistance is at around 2,110-2,115, marked by previous local highs, and the next resistance level is at 2,130-2,135, marked by late May all-time high. On the other hand, level of support remains at around 2,040-2,060. There have been no confirmed negative signals so far. However, we still can see negative medium-term technical divergences:

Expectations before the opening of today's trading session are negative, with index futures currently down 0.3-0.4%. The main European stock market indexes have lost 0.9-1.1% so far. Investors will now wait for some economic data announcements: Consumer Price Index at 8:30 a.m., Crude Inventories at 10:30 a.m., FOMC Minutes at 2:00 p.m. The S&P 500 futures contract (CFD) trades within an intraday downtrend, as it continues its recent decline. The nearest important level of support is at around 2,080, and resistance level is at 2,100, among others, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it trades lower this morning. The nearest important level of support is at 4,500, and resistance level is at 4,550-4,570, as we can see on the 15-minute chart:

Concluding, the broad stock market remains within a short-term consolidation, as investors continue to hesitate following quarterly corporate earning releases, economic data announcements. 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 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
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