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 main U.S. stock market indexes gained 1.4-1.5% on Monday, retracing some of their last week's move down, as investors reacted to economic data releases, among others. The S&P 500 index bounced off support level of 2,020. The nearest important level of resistance is at 2,050-2,070, and the next resistance level is at around 2,100. There have been no confirmed positive signals so far. It looks like an upward correction following recent decline:

Expectations before the opening of today's trading session are positive, with index futures currently up 0.4-0.5%. The European stock market indexes have gained 1.9-2.4% so far. Investors will now wait for some economic data announcements: Consumer Price Index at 8:30 a.m., Industrial Production, Capacity Utilization at 9:15 a.m., NAHB Housing Market Index at 10:00 a.m. The S&P 500 futures contract (CFD) trades within an intraday uptrend, as it continues its yesterday's move up. The nearest important level of support is at around 2,045-2,050, and resistance level is at 2,060-2,070, marked by previous local lows, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it extends yesterday's advance. The nearest important level of resistance is at around 4,600. On the other hand, support level is at 4,550, as we can see on the 15-minute chart:

Concluding, the broad stock market has retraced some of its last week's decline on Monday. There have been no confirmed positive signals so far. We expect a downward correction or short-term uptrend reversal. Therefore, we continue to maintain our already profitable 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
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