Briefly: In our opinion, no speculative positions are justified at this moment.
Our intraday outlook is neutral, and our short-term outlook is neutral:
Intraday
(next 24 hours) outlook: neutral
Short-term (next 1-2 weeks) outlook: neutral
Medium-term (next 1-3 months) outlook: neutral
Long-term outlook (next year): bullish
The U.S. stock market indexes closed virtually flat on Thursday, following some increased volatility as investors hesitated after recent move down. Our yesterday’s neutral intraday outlook has proved accurate. The S&P 500 index remained within its Wednesday’s trading range, moving along the level of 1,850. The level of support remains at around 1,820-1,840, marked by recent local lows. On the other hand, the resistance level is at 1,870-1,880, marked by previous support level. For now, it looks like a flat correction within a downtrend, as there have been no confirmed downtrend reversal signals so far:
Expectations before the opening of today’s session are positive, with index futures currently up 1.0-1.3%. The main European stock market indexes have gained 0.9-2.0% so far. Investors will now wait for some economic data announcements: Housing Starts, Building Permits at 8:30 a.m., Michigan Sentiment number at 9:55 a.m. The S&P 500 futures contract (CFD) is in an intraday uptrend, as it is above yesterday’s trading range. The nearest important level of resistance is at around 1,880-1,890, marked by recent local highs. On the other hand, the support level remains at 1,850, among others, as we can see on the 15-minute chart:
The technology Nasdaq 100 futures contract (CFD) continues to rebound, following yesterday’s fluctuations. The nearest important resistance level is at around 3,800, marked by previous support level. For now, it looks like an upward correction within a short-term downtrend, as the 15-minute chart shows:
Concluding, the broad stock market entered a period of uncertainty, following recent move down. There are some short-term oversold conditions which may lead to an upward correction or downtrend reversal at some point. Therefore, we prefer to be out of the market at this moment. 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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