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 between 0.2% and 0.6% on Tuesday, extending their short-term consolidation, as investors reacted to some further Greece debt crisis news releases. The S&P 500 index broke below the level of 2,050, before bouncing off support level at 2,040-2,050. The nearest important level of resistance is at around 2,090-2,100. For now, it looks like an upward correction within a short-term downtrend:
Expectations before the opening of today's trading session are negative, with index future currently down 0.8%. The European stock market indexes have gained 0.3-0.7% so far. Investors will now wait for some economic data announcements: Crude Inventories at 10:30 a.m., FOMC Minutes at 2:00 p.m. The S&P 500 futures contract (CFD) trades within an intraday downtrend, following yesterday's fluctuations. The nearest important level of support is at 2,035-2,040, marked by local lows. On the other hand, resistance level is at 2,070-2,080, among others, 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 support level is at around 4,330-4,350, and resistance level remains at 4,430-4,450, as we can see on the 15-minute chart:
Concluding, the broad stock market continued to fluctuate on Tuesday, following further Greece debt crisis news releases. For now, it looks like a correction within 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
Stock Trading Alerts
