Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,140 and profit target at 1,990, 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): bearish
Long-term outlook (next year): bullish

The U.S. stock market indexes gained between 0.9% and 1.2% on Monday, extending their short-term uptrend, as investors reacted to economic data, quarterly corporate earnings releases. The S&P 500 index broke slightly above the level of 2,100. The nearest important level of resistance is at 2,100-2,130. On the other hand, support level remains at 2,020-2,050, marked by previous resistance level. There have been no confirmed short-term negative signals so far, however, we can see technical overbought conditions:

Expectations before the opening of today's trading session are negative, with index futures currently down 0.2-0.3%. The main European stock market indexes have lost 0.2-0.3% so far. Investors will now wait for the Factory Orders number release at 10:00 a.m. The S&P 500 futures contract (CFD) trades within an intraday downtrend, as it retraces some of yesterday's advance. The nearest important level of resistance is at 2,100, and support level is at 2,080, among others, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it retraces some of yesterday's rally. The nearest important level of resistance is at 4,700, and support level remains at 4,570-4,580, among others, as we can see on the 15-minute chart:

Concluding, the broad stock market continued its short-term uptrend on Monday, as the S&P 500 index broke slightly above the level of 2,100. There have been no confirmed short-term negative signals so far. However, we can see overbought conditions. We expect a downward correction or short-term uptrend reversal. Therefore, we continue to maintain our speculative short position (2,088.35, S&P 500 index). Stop-loss is at 2,140 and potential profit target is at 1,990 (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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