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 U.S. stock market indexes lost 0.8-0.9% on Tuesday, retracing their Monday's move up, as investors continued to hesitate following two-month long advance. The S&P 500 index trades within a short-term consolidation as it remains above support level of 2,050. On the other hand, resistance level is at 2,070-2,075, marked by the recent consolidation. The next level of resistance remains at 2,100-2,115, marked by medium-term local highs. Is this the end of two-month long uptrend? Or is this just relatively flat correction before another leg up reaching last year's all-time high? Last year's highs along the level of 2,100 continue to act as medium-term resistance level, as we can see on the daily chart:

Expectations before the opening of today's trading session are negative, with index futures currently down 0.6-0.7%. The European stock market indexes have lost 0.7-1.2% so far. Investors will now wait for some economic data announcements: ADP Employment Change report at 8:15 a.m., Productivity, Trade Balance at 8:30 a.m., Factory Orders, ISM Services at 10:00 a.m., Crude Inventories at 10:30 a.m. The S&P 500 futures contract trades within an intraday downtrend. The nearest important level of support is at 2,040-2,050, marked by Friday's local low, among others. On the other hand, resistance level is at 2,060, marked by yesterday's intraday consolidation. The next resistance level is at 2,070-2,075. The market extends its slightly descending short-term trading channel, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract trades within a similar intraday downtrend, as it retraces its recent rebound. The nearest important level of resistance is at around 4,350-4,380, and support level is at 4,300 mark. Is this still just downward correction or a new downtrend?

Concluding, the broad stock market extended its fluctuations yesterday, as investors reacted negatively to some worse-than-expected economic data releases. We still can see technical overbought conditions that may lead to uptrend's reversal or downward correction. However, there have been no confirmed negative signals so far. For now, it looks like a relatively flat correction within over two-month-long medium-term uptrend. 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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