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

Our intraday outlook is neutral, and our short-term outlook is neutral. Our medium-term outlook remains bearish, as the S&P 500 index extends its lower highs, lower lows sequence. We decided to change our long-term outlook to neutral recently, following a move down below medium-term lows:

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

The U.S. stock market indexes gained between 0.3% and 0.9% on Wednesday, following volatile trading session, as investors reacted to economic data releases, oil prices fluctuations. The S&P 500 index continues to trade within a short-term consolidation along the level of 1,900. The nearest important level of resistance is at around 1,950, marked by the early February local high of 1,947.20. On the other hand, support level is at 1,900, and the next important level of support is at around 1,870, marked by last week's daily gap up. For now, it looks like a consolidation following first half of January sell-off. Will it continue downwards? Or is the bullish downtrend's reversal scenario currently in play? Last year's August - September lows continue to act as medium-term support level, as we can see on the daily chart:

Expectations before the opening of today's trading session are virtually flat. The main European stock market indexes have gained 0.8-2.1% so far. Investors will now wait for some economic data announcements: Initial Claims, Durable Orders at 8:30 a.m., FHFA Housing Price Index at 9:00 a.m. The S&P 500 futures contract trades within an intraday consolidation, following yesterday's rebound. The nearest important level of resistance is at around 1,930-1,935, marked by local highs. On the other hand, support level remains at 1,920, among others, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract follows a similar path, as it trades within an intraday consolidation. The nearest important level of resistance is at around 4,200-4,220, and support level is at 4,180. There have been no confirmed negative signals so far. For now, it looks like a consolidation following recent move up. But will it continue higher?

Concluding, the broad stock market extended its volatile short-term consolidation on Wednesday, as the S&P 500 index bounced off support level of 1,900. The index continues to trade along last year's August - September local lows, as they act as medium-term level of support. There have been no confirmed short-term negative signals so far. However, we can see some short-term overbought conditions. Our speculative long position has been closed at the opening of last week's Thursday's cash market trading session (1,925, Thursday's average opening price of the S&P 500 index). Overall, we gained 90 index points on that trade. 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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