Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,060 and profit target at 1,900, 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 0.6-1.1% on Tuesday, extending their Monday's move up, as investors reacted to economic data releases, among others. The S&P 500 index continues to bounce off support level of 2,000. The nearest important level of resistance is at around 2,080-2,100. For now, it looks like a consolidation following October rally:

Expectations before the opening of today's trading session are positive, with index futures currently up 0.8-0.9%. The European stock market indexes have gained 0.4-0.9% so far. Investors will now wait for some economic data announcements: Building Permits, Housing Starts at 8:30 a.m., Industrial Production, Capacity Utilization at 9:15 a.m., Crude Inventories at 10:30 a.m., FOMC Rate Decision at 2:00 p.m. The S&P 500 futures contract (CFD) trades within an intraday uptrend, as it extends yesterday's move up. The nearest important level of resistance is at around 2,050, and support level is at 2,030, among others, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it currently trades above the level of 4,600. The nearest important level of resistance is at 4,650-4,670, and support level is at 4,590-4,600, as the 15-minute chart shows:

Concluding, the broad stock market extended its short-term uptrend on Tuesday, as investors awaited today's FOMC Interest Rate Decision release. We continue to maintain our already profitable speculative short position (2,088.35, S&P 500 index). The stop-loss level remains at 2,060 and potential profit target is at 1,900 (S&P 500 index). If the cash market will open above the level of 2,060 today, we will close this short position at the opening of today's trading session. The S&P 500 futures trade just below this (cash market) stop-loss level at this moment. 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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