Briefly: In our opinion, no speculative positions are justified.

Our intraday outlook is neutral, and our short-term outlook is neutral. Our medium-term outlook remains bearish, as the S&P 500 index extends its lower highs, lower lows sequence. We decided to change our long-term outlook to neutral recently, following a move down below medium-term lows:

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

The U.S. stock market indexes lost 0.7-0.8% on Monday, retracing some of their last week's move up, as investors took short-term profits off the table. The S&P 500 index continues to trade along the level of 1,950, following a mid-February rebound off support level at 1,800. The nearest important level of resistance is at around 1,950-1,960, and the next resistance level is at 1,980-2,000, marked by previous consolidation. On the other hand, the nearest important support level is at 1,900-1,920, marked by recent consolidation. There have been no confirmed negative signals so far. However, it looks like an upward correction following January sell-off. Last year's August - September lows continue to act as medium-term support level, as we can see on the daily chart:

Expectations before the opening of today's trading session are positive, with index futures currently up 0.6-0.8%. The main European stock market indexes have gained 0.6-1.4% so far. Investors will now wait for some economic data releases: Construction Spending, ISM Index at 10:00 a.m. The S&P 500 futures contract trades within an intraday uptrend, as gets closer to its recent local highs. There have been no confirmed negative signals so far. The nearest important level of resistance is at around 1,950-1,970. On the other hand, support level remains at 1,920, marked by short-term local lows, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract follows a similar path, as it extends its short-term consolidation. It currently trades above the level of 4,200. The nearest important level of resistance is at 4,250-4,300, marked by local highs, and support level is at 4,180-4,200. For now, it looks like a relatively flat correction following recent advance. Will it continue higher?

Concluding, the broad stock market remained within a short-term consolidation on Monday, as investors reacted to some economic data releases, further oil prices fluctuations. There have been no confirmed negative signals so far. Is this just a correction following recent move up or topping action before uptrend's reversal? The index continues to trade along last year's August - September local lows, as they act as medium-term level of support. For now, it looks like a correction within a medium-term downtrend. We prefer to be out of the market, avoiding low risk/reward ratio trades. We will let you know when we think it is safe to get back in the market.

Thank you.

Paul Rejczak
Stock Trading Strategist
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