Briefly: In our opinion, no speculative positions are justified.

Our intraday outlook is neutral, and our short-term outlook is neutral. Our medium-term outlook remains bearish, as the S&P 500 index extends its lower highs, lower lows sequence. However, we decided to change our long-term outlook to neutral recently, following recent move down below medium-term lows:

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): neutral

The main U.S. stock market indexes were mixed between -0.5% and +1.1% on Wednesday, following volatile trading session, as investors reacted to oil prices fluctuations, economic data releases. The S&P 500 index continues to trade along the level of 1,900. The nearest important level of resistance is at around 1,950, marked by Monday's local high. On the other hand, support level is at 1,870, marked by recent local lows. The market fluctuates following first half of January sell-off. There have been no confirmed positive signals so far. Last year's August - September lows continue to act as a medium-term support level, as we can see on the daily chart:

Expectations before the opening of today's trading session are positive, with index futures currently up 0.3-0.4%. The main European stock market indexes have gained 0.3-1.2% so far. Investors will now wait for some economic data announcements: Initial Claims, Productivity at 8:30 a.m., Factory Orders at 10:00 a.m. The S&P 500 futures contract trades within an intraday consolidation, as it fluctuates following yesterday's rebound. The nearest important level of resistance is at around 1,920-1,950, marked by local highs. On the other hand, support level is at 1,900. The market continues to fluctuate following last month's decline:

The technology Nasdaq 100 futures contract follows a similar path, as it currently trades along the level of 4,200. The nearest important level of resistance is at around 4,220, marked by recent local high. On the other hand, support level is at 4,150, among others. There is no clear short-term direction, however, we can see an increased volatility, as the 15-minute chart shows:

Concluding, the broad stock market extends its short-term fluctuations, as the S&P 500 index trades along the level of 1,900. Investors will wait for tomorrow's important monthly employment data announcement, so we may see more volatile short-term action. Will the market continue its January's move down, or is this a bottoming consolidation before some more meaningful medium-term downtrend's reversal? For now, the index continues to trade along its last year's August - September local lows, as they act as a medium-term level of support. We still 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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