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 gained 0.5-0.6% on Tuesday, retracing some of their recent decline, as investors hunted for bargains. The S&P 500 index bounced off support level at around 2,070-2,080. The nearest important level of resistance is at 2,100, and the next resistance level is at 2,115, marked by local high. There have been no confirmed negative signals so far, however, we still can see negative technical divergences:
Expectations before the opening of today's trading session are positive, with index futures currently up 0.3%. The main European stock market indexes have lost 0.2-0.5% so far. Investors will now wait for economic data announcements: 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 breaks above the level of 2,100. The nearest important support level remains at around 2,095, as the 15-minute chart shows:
The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it breaks above resistance level of 4,450. The next resistance level is at around 4,500. On the other hand, level of support is at 4,440-4,450, among others, as we can see on the 15-minute chart:
Concluding, the broad stock market retraced some of its recent move down yesterday, as investors awaited today's FOMC Rate Decision release. 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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