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 lost 0.1-0.3% on Tuesday, extending their short-term consolidation, as investors continued to hesitate following last month's move up. The S&P 500 index remains relatively close to its May 20 all-time high of 2,134.72. The nearest important level of resistance is at around 2,130-2,135, and support level is at 2,100, among others. There have been no confirmed negative signals so far. However, we can see negative technical divergences:

Expectations before the opening of today's trading session are slightly positive, with index futures currently up 0.1-0.2%. The main European stock market indexes have been mixed so far. Investors will now wait for series of economic data announcements: ADP Employment Change report at 8:15 a.m., Trade Balance at 8:30 a.m., ISM Services at 10:00 a.m., Crude Inventories at 10:30 a.m., Fed's Beige Book report at 2:00 p.m. The S&P 500 futures contract (CFD) is within an intraday consolidation, as continues to trade along the level of 2,100. The nearest important level of support is at 2,090-2,100, and resistance level is at 2,115-2,120, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it continues to trade along the level of 4,500. The nearest important support level remains at 4,480-4,500, and resistance level is at 4,530-4,550, as we can see on the 15-minute chart:

Concluding, the broad stock market extended its short-term consolidation on Tuesday. There have been no confirmed negative signals so far. However, we continue to maintain our speculative short position (2,098.27, S&P 500 index), as we expect a 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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