Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,210, and profit target at 2,050, S&P 500 index).

Our intraday outlook is bearish, and our short-term outlook is bearish. Our medium-term outlook is neutral, following S&P 500 index breakout above last year's all-time high:

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): neutral

The main U.S. stock market indexes lost 0.3-0.4% on Tuesday, retracing some of their Monday's advance, as investors hesitated following quarterly earnings, economic data releases. The S&P 500 index continues to trade close to its resistance level of 2,150. There has been no clear short-term direction so far. The next resistance level is at 2,170-2,180, marked by some previous local highs. On the other hand, level of support is at 2,130, and the next support level is at 2,115-2,120, marked by previous local lows. The market continues to trade along medium-term upward trend line, as the daily chart shows:

Expectations before the opening of today's trading session are negative, following yesterday's worse-than-expected Apple's quarterly earnings release, with index futures currently down %. The European stock market indexes have lost % so far. Investors will now wait for some economic data announcements: Case-Shiller 20-city Index, FHFA Housing Price Index at 9:00 a.m., Consumer Confidence at 10:00 a.m. The S&P 500 futures contract trades within an intraday downtrend, as it extends its yesterday's move down. The nearest important resistance level is at around 2,140-2,150. On the other hand, support level is at 2,120-2,130, marked by previous local lows, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract follows a similar path, as it retraces some of its recent rally. The nearest important resistance level is at around 4,880-4,900. On the other hand, support level is at 4,830-4,850, and the next support level is at 4,800 mark, among others:

Concluding, the broad stock market extends its short-term consolidation, as the S&P 500 index remains close to 2,150 mark. For now, it looks like a relatively flat correction within a downtrend. Therefore, we continue to maintain our speculative short position (opened on July 18th at 2,162, S&P 500 index). Stop-loss level is at 2,210 and potential profit target is at 2,050 (S&P 500 index). 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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