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:

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 main U.S. stock market indexes gained between 0.6% and 1.6% on Tuesday, as investors' sentiment improved following Fed's Janet Yellen's speech, economic data releases. The S&P 500 index got close to its last week's local high of 2,056.60. The nearest important level of resistance is at around 2,070-2,080, marked by the late December local high of 2,081.56. The next resistance level is at 2,100-2,120, marked by some previous medium-term highs. On the other hand, support level remains at 2,000, and the next support level is at 1,960-1,980, marked by previous level of resistance. There have been no confirmed negative signals so far. However, we can see some technical overbought conditions. The index continues to trade within a slightly descending medium-term trading channel, as the daily chart shows:

Expectations before the opening of today's trading session are positive, with index futures currently up 0.6-0.8%. The European stock market indexes have gained 1.7-2.0% so far. Investors will now wait for some economic data announcements: ADP Employment Change number at 8:15 a.m., Crude Inventories at 10:30 a.m. The S&P 500 futures contract trades within an intraday uptrend, as it extends its yesterday's advance. It is the highest since late December. The nearest important level of resistance is at around 2,070-2,075, marked by late December local highs. On the other hand, support level is at 2,040-2,050, marked by previous resistance level. The next important level of support is at around 4,320-4,350, marked by previous consolidation, among others. We can see some short-term technical overbought conditions:

The technology Nasdaq 100 futures contract follows a similar path, as it currently trades close to the level of 4,500. The nearest important level of support is at around 4,420-4,440, marked by previous resistance level. The next support level remains at 4,400 mark, as we can see on the 15-minute chart:

Concluding, the S&P 500 index got close to its last week's high yesterday. It will probably continue its short-term uptrend today, following futures contract breaking above its last week's high. However, we can see some short-term technical overbought conditions. Yet, there have been no confirmed negative signals. We still 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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