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 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 U.S. stock market indexes lost 0.2-0.3% on Friday, extending their short-term consolidation, as investors reacted to monthly jobs data release, among others. The S&P 500 index trades along its July - August consolidation, following the early September decline. The nearest important level of resistance is at around 2,170-2.180, marked by recent local highs. On the other hand, support level is at around 2,140-2,150, marked by local lows. The next important support level remains at 2,120. The market trades within a correction following recent rally. Will it continue its uptrend? Or is this some topping pattern before downward reversal?

Expectations before the opening of today's trading session are positive, with index futures currently up 0.3-0.4%. The European stock market indexes have gained 0.2-0.5% so far. The S&P 500 futures contract trades within an intraday uptrend, as it retraces most of its Friday's decline. The nearest important resistance level is at around 2,155-2,160, marked by local high. On the other hand, support level is at 2,135-2,140, marked by Friday's local low, among others, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract remains relatively stronger than the broad stock market, as it continues to trade close to all-time high. It is within an intraday uptrend, following Friday's move down. The nearest important level of resistance is at 4,880-4,900. On the other hand, support level remains at 4,830-4,850, as the 15-minute chart shows:

Concluding, the broad stock market extended its short-term consolidation on Friday, as the S&P 500 index continued to fluctuate along the level of 2,150. There have been no confirmed negative signals so far. However, 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.

Thank you.

Paul Rejczak
Stock Trading Strategist
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