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 were virtually flat on Tuesday, as investors took some short-term profits following Monday's rally. The S&P 500 index bounced off resistance level of 2,070, marked by last week's daily gap down. The next important level of resistance is at around 2,100. On the other hand, support level is at 2,020, marked by  recent local low. There have been no confirmed positive signals so far. It looks like an upward correction within a short-term downtrend:

Expectations before the opening of today's trading session are virtually flat. The main European stock market indexes have lost 0.3-0.8% so far. Investors will now wait for some economic data announcements: Housing Starts, Building Permits at 8:30 a.m., Crude Inventories at 10:30 a.m., FOMC Minutes release at 2:00 p.m. The S&P 500 futures contract (CFD) trades within an intraday consolidation, following yesterday's move down. The nearest important level of support is at around 2,040, and resistance level is at 2,060, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it currently trades along the level of 4,570. The nearest important level of resistance is at 4,600, and support level is at 4,550, as we can see on the 15-minute chart:

Concluding, the broad stock market remained within short-term consolidation on Tuesday, following its Monday's advance. 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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