Briefly: In our opinion, no speculative positions are justified.
Our intraday outlook is now neutral, and our short-term outlook is neutral:
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): bullish
The U.S. stock market indexes lost 0.2-0.3% on Thursday, as they slightly extended their recent move down. Our yesterday's neutral intraday outlook has proved accurate. The S&P 500 index bounced off support level of 2,040-2,050, marked by some previous local lows. On the other hand, the nearest important level of resistance is at around 2,070-2,080. For now, it looks like further medium-term consolidation following October-November rally. There have been no confirmed short-term positive signals so far:
Expectations before the opening of today's trading session are virtually flat. The main European stock market indexes have been mixed so far. Investors will now wait for some economic data announcements: U.S. GDP - Third Estimate number at 8:30 a.m., Michigan Sentiment at 10:00 a.m. The S&P 500 futures contract (CFD) extends its short-term consolidation, as it fluctuates along the level of 2,050. The nearest important level of support is at around 2,030, marked by yesterday's low. The nearest important level of resistance is at 2,055-2,060, marked by local highs, as we can see on the 15-minute chart:
The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it continues to fluctuate along the level of 4,300. The nearest important resistance level is at around 4,330, and support level remains at 4,270-4,280, as the 15-minute chart shows:
Concluding, the broad stock market slightly extended its short-term downtrend on Thursday, before bouncing off support level. For now, it looks like some further medium-term consolidation, following last year's October-November rally. 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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