Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,140, and profit target at 2,000, S&P 500 index).

Our intraday outlook is bearish, and our short-term outlook is bearish. Our medium-term outlook remains bearish, as the S&P 500 index extends its lower highs, lower lows sequence:

Intraday outlook (next 24 hours): bearish
Short-term outlook (next 1-2 weeks): bearish
Medium-term outlook (next 1-3 months): bearish
Long-term outlook (next year): neutral

The main U.S. stock market indexes gained between 0.3% and 0.6% on Monday, extending their short-term uptrend, as investors reacted to economic data releases, Fed's Janet Yellen speach. The S&P 500 index broke above the level of 2,100 yesterday. The nearest important resistance level is at 2,110-2,115, marked by April's local high. The next resistance level is at around 2,130, marked by last year's all-time high of 2,134.72. On the other hand, support level is at 2,100, marked by previous level of resistance. The next important support level is at around 2,070-2,085. Last year's highs along the level of 2,100 continue to act as medium-term resistance level. Will the market break above these medium-term highs and continue its seven-year long bull market?

Expectations before the opening of today's trading session are positive, with index futures currently up 0.3-0.4%. The European stock market indexes have gained 0.4-1.7% so far. The S&P 500 futures contract trades within an intraday uptrend, as it extends its yesterday's move up. The nearest important level of support is at around 2,100-2,105, marked by previous level of resistance. The next important support level remains at 2,080-2,090. On the other hand, resistance level is at 2,115-2,130. There have been no confirmed negative signals so far. However, we can see some short-term overbought conditions:

The technology Nasdaq 100 futures contract follows a similar path, as it extends its short-term uptrend. The nearest important level of resistance is at around 4,540-4,550. On the other hand, support level remains at 4,500-4,520, among others, as we can see on the 15-minute chart:

Concluding, the broad stock market extended its short-term uptrend on Monday, following some economic data announcements. There have been no confirmed negative signals so far. However, we can see technical overbought conditions that may lead to uptrend's reversal or downward correction. Therefore, we continue to maintain our speculative short position (opened at 2,093.94 - last Wednesday's opening price of the S&P 500 index). Stop-loss level is at 2,140 and potential profit target is at 2,000 (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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