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 U.S. stock market indexes gained 0.1% on Tuesday, as investors hesitated following recent move up. The S&P 500 remains relatively close to its late May all-time high of 2,134.72. The nearest important level of resistance is at around 2,130-2,135. On the other hand, support level is at 2,110-2,100, among others. There have been no confirmed negative signals so far, however, we still can see negative technical divergences:
Expectations before the opening of today's trading session are slightly negative, with index futures currently down 0.2-0.3%. The main European stock market indexes have been mixed so far. Investors will now wait for some economic data announcements: GDP - Third Estimate number at 8:30 a.m., Crude Inventories at 10:30 a.m. The S&P 500 futures contract (CFD) trades within an intraday downtrend, as it retraces recent move up. The nearest important level of resistance is at around 2,115-2,120, marked by local highs. On the other hand, support level is at 2,100, as the 15-minute chart shows:
The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it trades lower this morning. The nearest important level of support is at 4,500-4,520, and resistance level is at 4,550, as we can see on the 15-minute chart:
Concluding, the broad stock market extends its fluctuations along record highs, as investors react to economic news announcements. 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
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