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 gained between 0.1% and 1.4% on Monday, extending their last week’s rebound, as investors awaited some quarterly corporate earnings releases. The S&P 500 index moved slightly above the level of 1,900, however the level of resistance remains at around 1,900-1,910, marked by the early August local low, among others. The next resistance level is at around 1,925, marked by some previous local lows. For now, it looks like an upward correction within a short-term downtrend, as there have been no confirmed downtrend reversal signals so far:
Expectations before the opening of today’s trading session are positive, with index futures currently up 0.3-0.5%. The main European stock market indexes have gained 0.8-1.6% so far. Investors will now wait for the Existing Home Sales data announcement at 10:00 a.m. The S&P 500 futures contract (CFD) is in an intraday uptrend, as it retraces yesterday’s after hours’ move down. The nearest important level of resistance is at around 1,900-1,905. On the other hand, the support level is at 1,885, marked by local low, as we can see on the 15-minute chart:
The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it trades above yesterday’s local high. The level of resistance is at around 3,880-4,000, and the nearest important support level remains at 3,845-3,850, among others, as the 15-minute chart shows:
Concluding, the broad stock market continues to rebound, following last week’s move down. There are still some short-term oversold conditions which may lead to an upward correction or downtrend reversal. However, there have been no confirmed downtrend reversal signals so far. It seems that taking profits off the table last week was a good idea, as the market is at the same place again. Actually, we prefer to be out of the market at this moment, as we expect more short-term volatility. 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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