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:

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 +0.2% on Tuesday, extending their short-term uncertainty, as investors reacted to economic data, quarterly earnings releases. The S&P 500 index continues to trade slightly below the level of 2,100, following over two-month long uptrend. The nearest important level of resistance is at 2,100-2,115, marked by last year's medium-term local highs. The next important level of resistance is at 2,120-2,135, marked by last year's May S&P 500's all-time high of 2,134.72. On the other hand, support level is at 2,075-2,080, marked by some short-term local lows, and the next level of support is at around 2,065, marked by the daily gap up of 2,065.05-2,065.92. 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? For now, it looks like a short-term consolidation within an uptrend:

Expectations before the opening of today's trading session are negative, with index futures currently down 0.2-1.2%. The main European stock market indexes have been mixed so far. Investors will now wait for some economic data announcements: Pending Home Sales at 10:00 a.m., Crude Inventories at 10:30 a.m., and the important FOMC Rate Decision release at 2:00 p.m. The S&P 500 futures contract trades within an intraday consolidation, as it continues to fluctuate along the level of 2,080. The nearest important level of resistance is at 2,090, marked by local highs. On the other hand, support level remains at around 2,070, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract trades within an intraday consolidation, after yesterday's after-hours sell-off following worse-than-expected Apple's quarterly earnings release. The nearest important level of resistance is at around 4,430-4,450, marked by previous support level. The nearest important level of support is at 4,400, marked by short-term local lows, as we can see on the 15-minute chart:

Concluding, the broad stock market extends its short-term consolidation, as the S&P 500 index remains relatively close to its last year's medium-term local highs. However, investors react negatively to some major tech sector companies quarterly corporate earnings releases. Will they drive the whole stock market down? 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 last Tuesday (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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