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 lost 0.4-0.5% on Thursday, following a move below recent local lows, as investors reacted to economic data releases, among others. The S&P 500 index got closer to the level of 2,000. The nearest important level of support is at around 2,030-2,040. The next support level is at 2,000-2,020. On the other hand, the nearest important level of resistance is at 2,050-2,060, marked by recent local highs. The next resistance level is at 2,070-2,085, marked by last week's local highs. Last year's highs along the level of 2,100 continue to act as medium-term resistance level. Will the market break above these medium-term highs and continue its seven-year long bull market?

Expectations before the opening of today's trading session are slightly positive, with index futures currently up 0.2-0.3%. The European stock market indexes have gained 0.9-1.3% so far. Investors will now wait for the Existing Home Sales number announcement at 10:00 a.m. The S&P 500 futures contract trades within an intraday consolidation, following rebound off support level at around 2,020-2,030. On the other hand, resistance level is at 2,050, among others. The market extends its slightly descending trading channel, as it gets closer to 2,000 mark. Is this still just a correction following February - April rally or a new downtrend? There have been no confirmed positive signals so far.

The technology Nasdaq 100 futures contract follows a similar path, as it trades within an intraday consolidation along the level of 4,330. The nearest important level of resistance is at around 4,340-4,360, marked by short-term local highs. On the other hand, support level remains at 4,280-4,300, among others, as we can see on the 15-minute chart:

Concluding, the broad stock market extended its short-term volatility yesterday, as the S&P 500 index broke below its Wednesday's daily low, before closing at around 2,040 mark. The index is still relatively close to last year's medium-term highs along the level of 2,100 and continues to trade above its late March - early April lows. It still looks like a correction within a medium-term uptrend, so 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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