Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,210, and profit target at 2,050, S&P 500 index).

Our intraday outlook is bearish, and our short-term outlook is bearish. Our medium-term outlook is neutral, following S&P 500 index breakout above last year's all-time high:

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): neutral

The U.S. stock market indexes lost 0.3% on Monday, extending their short-term consolidation, as investors awaited quarterly corporate earnings releases, among others. The S&P 500 index remains close to its September lows of 2,120. The nearest important level of support is at around 2,100-2,120. On the other hand, resistance level is at around 2,140-2,150, marked by previous support level. The next resistance level is at 2,170, among others. The market continues to trade along medium-term upward trend line, as the daily chart shows:

Expectations before the opening of today's trading session are very positive, with index futures currently up 0.4-0.6%. Investors will now wait for some economic data releases: Consumer Price Index at 8:30 a.m., NAHB Housing Market Index at 10:00 a.m. The S&P 500 futures contract trades within an intraday uptrend, as it retraces its recent move down. The nearest important level of support remains at around 2,100-2,120. On the other hand, resistance level is at 2,140-2,145, marked by some previous local highs, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract follows a similar path, as it trades within an intraday uptrend. The nearest important support level remains at 4,780-4,800, marked by previous consolidation. On the other hand, level of resistance is at 4,840-4,850, and the next resistance level is at 4,880-4,900, marked by an all-time high:

Concluding, the broad stock market extended its short-term fluctuations on Monday, as investors continued to hesitate following recent move down. There have been no confirmed positive signals so far. Therefore, we continue to maintain our speculative short position (opened on July 18th at 2,162, S&P 500 index). Stop-loss level is at 2,210 and potential profit target is at 2,050 (S&P 500 index). 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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