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 were virtually flat on Thursday, as investors reacted to further economic news releases. The S&P 500 index remains within a short-term consolidation along the level of 2,050. The nearest important level of support is at 2,040-2,050, marked by March local lows. On the other hand, resistance level is at 2,080, marked by recent local highs:
Expectations before the opening of today's trading session are positive, with index futures currently up 0.9-1.1%. The main European stock market indexes have gained 1.2-3.0% so far, following positive Greece debt deal talks news. Investors will now wait for the Wholesale Inventories number at 10:00 a.m. The S&P 500 futures contract (CFD) trades within an intraday consolidation following yesterday's after-hours rebound. The nearest important level of resistance is at 2,065-2,070, and support level is at 2,055-2,060, among others, as the 15-minute chart shows:
The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it trades along the level of 4,380. The nearest important level of resistance is at around 4,400, and support level remains at 4,330-4,350, as we can see on the 15-minute chart:
Concluding, the broad stock market remains within a volatile short-term consolidation. For now, it looks like a flat correction following two-week-long downtrend. Therefore, we continue to maintain our already profitable speculative short position (2,098.27, S&P 500 index), as we expect a medium-term 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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