Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,140, and profit target at 1,980, S&P 500 index)
Our intraday outlook is bearish, and our short-term outlook is bearish:
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): bullish
The main U.S. stock market indexes lost between 1.0% and 1.7% on Thursday, as investors reacted to quarterly corporate earnings releases, economic data announcements. Our yesterday's bearish intraday outlook has proved accurate. The S&P 500 index extended its short-term downtrend, as it broke below the level of 2,100. The nearest important level of resistance is at around 2,090-2,100. On the other hand, support level is at 2,070, marked by some previous local lows, as we can see on the daily chart:
Expectations before the opening of today's trading session are positive, with index futures currently up 0.2-0.3%. Investors will now wait for some economic data announcements: ISM Index, Construction Spending, Michigan Sentiment number at 10:00 a.m. The S&P 500 futures contract (CFD) trades within an intraday consolidation, following a quick rebound. The nearest important level of support is at around 2,070-2,080. On the other hand, resistance level is at 2,090-2,100, among others:
The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it fluctuates along the level of 4,415. The nearest important level of support is at 4,385-4,400, and resistance level is at 4,450, as the 15-minute chart shows:
Concluding, the S&P 500 index extended its short-term downtrend, as investors reacted to worse-than-expected economic data announcements, among others. We continue to maintain our speculative short position (2,098.27, S&P 500 index), as we expect a downward correction or an uptrend reversal. Stop-loss is at 2,140, and potential profit target is at 1,980. 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
Stock Trading Alerts
