Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,140, and profit target at 2,000, S&P 500 index).

Our intraday outlook is bearish, and our short-term outlook is bearish. Our medium-term outlook remains bearish, as the S&P 500 index extends its lower highs, lower lows sequence:

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

The U.S. stock market indexes lost 0.1-0.2% on Thursday, extending their short-term consolidation, as investors hesitated following recent rally. The S&P 500 index continues to trade slightly above the level of 2,100. The nearest important resistance level is at 2,110-2,120, marked by April's local high. The next resistance level is at around 2,130, marked by last year's all-time high of 2,134.72. On the other hand, support level is at 2,100, marked by previous level of resistance. The next important support level is at around 2,070-2,085. Last year's highs along the level of 2,100 continue to act as medium-term resistance level. Will the market break above these medium-term highs and continue its seven-year long bull market?

Expectations before the opening of today's trading session are negative, with index futures currently down 0.5-0.9%. The European stock market indexes have lost 1.6-2.2% so far. Investors will now wait for the Michigan Sentiment number release 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 level of support is at around 2,100. On the other hand, resistance level remains at 2,115-2,120. There have been no confirmed short-term positive signals so far:

The technology Nasdaq 100 futures contract follows a similar path, as it currently trades below the level of 4,500. The nearest important level of resistance is at 4,500-4,520, marked by previous support level. On the other hand, support level is at around 4,475-4,480, as we can see on the 15-minute chart:

Concluding, the broad stock market extended its short-term consolidation on Thursday, as the S&P 500 index remained above the level of 2,100. There have been no confirmed negative signals so far. However, we can see technical overbought conditions that may lead to uptrend's reversal or downward correction. Therefore, we continue to maintain our speculative short position (opened on June 1 at 2,093.94 - S&P 500 index). Stop-loss level is at 2,140 and potential profit target is at 2,000 (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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