Briefly: In our opinion, speculative long positions are favored (with stop-loss at 1,810, and profit target at 2,020, S&P 500 index)

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

Intraday outlook (next 24 hours): bullish
Short-term outlook (next 1-2 weeks): bullish
Medium-term outlook (next 1-3 months): bearish
Long-term outlook (next year): bullish

The U.S. stock market indexes were mixed between -0.5% and +0.3% on Tuesday, as investors hesitated following recent decline. The S&P 500 index got closer to its late August low of 1,867.08. The nearest important level of support is at around 1,860-1,880. On the other hand, resistance level is at 1,900, and the next important level of resistance is at 1,950. There have been no confirmed positive signals so far, however, we can see some short-term oversold conditions:

Expectations before the opening of today's trading session are positive, with index futures currently up 1.3-1.4%. The main European stock market indexes have gained 2.2-2.8% so far. Investors will now wait for some economic data announcements: ADP Employment Change report at 8:15 a.m., Chicago PMI at 10:00 a.m., Crude Inventories at 10:30 a.m. The S&P 500 futures contract (CFD) trades within an intraday uptrend, as it retraces some of its Monday's move down. The nearest important level of resistance is at 1,900, and support level is at 1,860-1,880, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it retraces its recent decline. The nearest important level of resistance is at around 4,130-4,140, marked by local highs. On the other hand, support level is at 4,040-4,060, as we can see on the 15-minute chart:

Concluding, the broad stock market remained within a short-term consolidation yesterday, following recent move down. There have been no confirmed positive signals so far. However, we continue to maintain our speculative long position (1,881.90, S&P 500 index), as we expect an upward correction or downtrend reversal. Stop-loss is at 1,810, and potential profit target is at 2,020. 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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