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

Our intraday outlook is neutral, and our short-term outlook is neutral:

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

The U.S. stock market indexes were virtually flat on Tuesday, as investors hesitated following recent sell-off. Our yesterday’s neutral intraday outlook has proved accurate. The S&P 500 index remains close to its local low, as it trades below the level of 1,900. The nearest important level of support is at 1,850-1,870, market by medium-term upward trend line, among others. On the other hand, the resistance level is at 1,900, marked by previous level of support. For now, it looks like a relatively flat correction within a short-term downtrend, as we can see on the daily chart:

Expectations before the opening of today’s trading session are negative, with index futures currently down between 0.2% and 0.4%. The main European stock market indexes have lost 0.9-1.2% so far. Investors will now wait for series of economic data announcements: Retail Sales number, Producer Price Index, Empire Manufacturing at 8:30 a.m., Business Inventories at 10:00 a.m., and finally, the Fed’s Beige Book release at 2:00 p.m. The S&P 500 futures contract (CFD) is close to its local lows, as it continues to trade along the level of 1,870. The nearest important level of support is at around 1,860-1,865, and the resistance level remains at 1,880-1,900, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract (CFD) moves along the level of 3,800, following recent sell-off. The nearest important level of resistance is at around 3,840-3,850, marked by yesterday’s highs. For now, it looks like a flat correction within a downtrend:

Concluding, the broad stock market fluctuates following recent move down, as the S&P 500 index trades below the level of 1,900. There are some short-term oversold conditions which may lead to an upward correction or downtrend reversal at some point. It seems that taking profits off the table on Monday was a good idea, as there may be some volatility ahead. Therefore, we prefer to be out of the market at this moment. 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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