Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,210, and profit target at 2,050, S&P 500 index).

Our intraday outlook is bearish, and our short-term outlook is bearish. Our medium-term outlook is now neutral, following S&P 500 index breakout above last year's all-time high:

Intraday outlook (next 24 hours): bearish
Short-term outlook (next 1-2 weeks): bearish
Medium-term outlook (next 1-3 months): neutral
Long-term outlook (next year): neutral

The main U.S. stock market indexes gained between 0.9% and 1.1% on Friday, extending their short-term uptrend, as investors reacted to better-than-expected jobs data release, among others. The S&P 500 index has reached new all-time high at the level of 2,182.87. The nearest important level of support is at around 2,170, marked by Friday's daily gap up of 2,168.19-2,168.79. The next important support level is at 2,150, marked by recent local low. On the other hand, potential resistance level is at 2,200. Will the market continue its upward March? There have been no confirmed negative signals so far. However, we can see short-term overbought conditions accompanied by some technical bearish divergences:

The broad stock market extends its seven-year-long bull market, as the S&P 500 index gets closer to 2,220 mark. Despite that relative strength and the overall bullish market sentiment, we continue to maintain our speculative short position (opened on July 18th at 2,162, S&P 500 index). Stop-loss level is at 2,210 and potential profit target is at 2,050 (S&P 500 index). You can trade S&P 500 index using futures contracts (S&P 500 futures contract - SP, E-mini S&P 500 futures contract - ES) or an ETF like the SPDR S&P 500 ETF - SPY. 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.

Due to a holiday break, beginning from next Monday until Friday, August 12, there will be no Stock Trading Alerts. We apologize for inconvenience.

As stated above, we continue to maintain our short position for the coming week. The stop-loss remains at 2,210, and potential profit target is at 2,050 (S&P 500 index).

Thank you.

Paul Rejczak
Stock Trading Strategist
Stock Trading Alerts