Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,140 and profit target at 1,990, 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): bearish
Long-term outlook (next year): bullish

The U.S. stock market indexes lost 0.1-0.3% on Wednesday, extending their short-term fluctuations, as investors continued to take profits off the table following October rally. The S&P 500 index trades along the level of 2,080. The nearest important level of resistance is at around 2,100. On the other hand, support level is at 2,055-2,060, marked by late October daily gap up. There have been no confirmed negative signals so far. However, we still can see overbought conditions:

Expectations before the opening of today's trading session are virtually flat, with index futures currently down 0.1%. The main European stock market indexes have lost 0.5-0.7% so far. Investors will now wait for some economic data announcements: Initial Claims at 8:30 a.m. JOLTS - Job Openings number at 10:00 a.m., Crude Inventories at 11:00 a.m. The S&P 500 futures contract (CFD) trades within an intraday downtrend, as it retraces yesterday's bounce. The nearest important level of resistance is at around 2,080, and support level is at 2,060-2,065, marked by previous lows, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it trades within an intraday downtrend. The nearest important level of support is at 4,600-4,620, and resistance level is at 4,650-4,670, as we can see on the 15-minute chart:

Concluding, the broad stock market extended its short-term fluctuations on Wednesday, as the S&P 500 index continued to trade along the level of 2,080. We expect a downward correction or short-term uptrend reversal. Therefore, we continue to maintain our speculative short position (2,088.35, S&P 500 index). Stop-loss is at 2,140 and potential profit target is at 1,990 (S&P 500 index). 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