Briefly: In our opinion, no speculative positions are justified
Our intraday outlook is now neutral, and our short-term outlook is neutral:
Intraday outlook (next 24 hours): neutral
Short-term outlook (next 1-2 weeks): neutral
Medium-term outlook (next 1-3 months): bearish
Long-term outlook (next year): bullish
The U.S. stock market indexes gained between 0.4% and 0.9% on Thursday, extending their short-term uptrend, as investors reacted to the FOMC Minutes report release. Our yesterday's bullish intraday outlook has proved accurate. The S&P 500 index broke above the level of 2,000. The nearest important resistance level is at around 2,020-2,050, marked by previous local high, among others. On the other hand, support level is at 1,970-2,000. There have been no confirmed medium-term positive signals so far. It still looks like a correction following late August sell-off:
Expectations before the opening of today's trading session are virtually flat, with index futures currently down 0.1%. The European stock market indexes have gained 0.8-1.0% so far. Investors will now wait for the Wholesale Inventories number at 10:00 a.m. The S&P 500 futures contract (CFD) fluctuates following its yesterday's advance, as it currently trades above the level of 2,000. The nearest important level of resistance is at 2,010, and support level is at 1,990-2,000, among others, as the 15-minute chart shows:
The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it trades within an intraday consolidation following yesterday's move up. The nearest important level of resistance is at 4,350-4,360, and support level remains at around 4,300, as we can see on the 15-minute chart:
Concluding, the broad stock market extended its short-term uptrend on Thursday, as the S&P 500 index broke above the level of 2,000. There have been no confirmed medium-term positive signals so far. It continues to look like a consolidation or a flat correction following late August sell-off. Our speculative long position's (1,881.90, S&P 500 index) profit target of 2,020 has almost been reached yesterday. Therefore, we decided to close the position at the opening of today's trading session. Overall, we have gained around 130 index points on that trade so far. As of this morning, we prefer to be out of the market, avoiding low risk/reward ratio trades. We will let you know when we think it is safe to get back in the market.
Thank you.
Paul Rejczak
Stock Trading Strategist
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