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

Our intraday outlook is now 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:

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 -0.6% and +0.3% on Tuesday, as investors reacted to quarterly corporate earnings releases. The S&P 500 index extended its short-term uptrend, as it reached resistance level of 2,100. The next important level of resistance is at 2,120-2,135, marked by some previous highs, including last year's May S&P 500's all-time high of 2,134.72. On the other hand, support level is at 2,065-2,070, marked by recent consolidation. There have been no confirmed negative signals so far. However, we can see some technical overbought conditions. But will the market break above its last year's all-time high?

Expectations before the opening of today's trading session are slightly negative, with index futures currently down 0.1-0.2%. The European stock market indexes have lost 0.1-0.5% so far. Investors will now wait for some economic data announcements: Existing Home Sales at 10:00 a.m., Crude Inventories number at 10:30 a.m. The S&P 500 futures contract trades within an intraday consolidation, following yesterday's volatility. The nearest important level of support is at around 2,085, marked by local lows. The nearest important resistance level remains at 2,100, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract is relatively weaker than the broad stock market, as it fluctuates along the level of 4,520, following yesterday's move down. The nearest important level of support is at 4,500, and resistance level is at 4,530-4,550, among others, as the 15-minute chart shows:

Concluding, the broad stock market slightly extended its two-month long uptrend on Tuesday, as investors reacted to quarterly corporate earnings releases. We still can see technical overbought conditions that may lead to uptrend's reversal or downward correction. However, there have been no confirmed short-term negative signals so far. Our speculative short position has been closed at the stop-loss level of 2,100 yesterday (S&P 500 index; the S&P 500 futures contract has reached its pre-session high at the level of 2,098 - 10 points above yesterday's daily high). We lost 54.44 index points on that trade, betting against over two-month-long uptrend. 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. Currently, 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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