Briefly: In our opinion, no speculative positions are justified.

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

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

The main U.S. stock market indexes gained between 0.6% and 0.7% on Monday, extending their short-term uptrend, as investors' sentiment remained bullish following last week's quarterly earnings, tax cut plan, economic data releases, among others.The S&P 500 index has reached yet another new all-time high at the level of 2,331.58. The Dow Jones Industrial Average continues to trade above support level of 20,000, and the technology Nasdaq Composite Index is above the level of 5,700. All three major indexes trade at new record highs. Will the market extend its year-long medium-term uptrend even further before some more meaningful downward correction? The nearest important level of support of the S&P 500 index is at around 2,320, marked by yesterday's daily gap up of 2,319.23-2,321.42. The next support level is at around 2,300-2,310, marked by previous level of resistance and Friday's daily gap up of 2,311.08-2,311.10. We can see some short-term volatility following three-month-long rally off last year's November low at around 2,100. Is this a topping pattern before downward reversal? The uptrend accelerates, and it looks like a blow-off top pattern accompanied by some buying frenzy. The S&P 500 index still trades above its medium-term upward trend line, as we can see on the daily chart:

Expectations before the opening of today's trading session are virtually flat, with index futures currently between -0.1% and 0.0%. The European stock market indexes have been mixed so far. Investors will wait for more quarterly corporate earnings releases, along with economic data announcements: Producer Price Index at 8:30 a.m. The market expects that prices of goods at the wholesale level grew 0.3% in January. The S&P 500 futures contract trades within an intraday consolidation following yesterday's move up. The nearest important level of support is at around 2,315-2.320, marked by previous level of resistance. The next support level remains at 2,300. On the other hand, resistance level is at around 2,330, marked by new record high. There have been no confirmed negative signals so far. However, we can see some short-term overbought conditions, along with negative technical divergences. Is this a topping pattern or just an intraday consolidation before another leg up?

The technology Nasdaq 100 futures contract follows a similar path, as it currently trades within an intraday consolidation after yesterday's rally. It has reached new all-time high above the level of 5,260. The technology sector stocks have been relatively stronger than the broad stock market recently following better-than-expected quarterly earnings releases. The nearest important support level is at 5,250, marked by some recent local lows, and the next support level is at around 5,200, among others. The market trades along new all-time highs, as the 15-minute chart shows:

Concluding, the broad stock market extended its medium-term uptrend even further, as it reached new record high above the level of 2,330 yesterday. Will the uptrend continue despite some clear short-term overbought conditions? Or is this some topping pattern before a downward correction? There have been no confirmed negative signals so far. However, we still can see medium-term overbought conditions accompanied by negative technical divergences. Our speculative short position has been closed yesterday, at the stop-loss level of 2,330 (S&P 500 index). We lost 61.65 index points on that trade, betting against year-long medium-term uptrend off last year's February local low. 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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