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 0.3% on Thursday, extending their recent move up, as investors reacted to some economic data releases, among others. The S&P 500 index has managed to close slightly above the level of 2,100. The nearest important resistance level is at 2,110-2,115, marked by April's local high of 2,111.05. 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 2,070-2,085, marked by previous level of resistance. The next important level of support is at 2,030-2,050. 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 virtually flat. The European stock market indexes have gained 0.5-1.0% so far. Investors will now wait for series of important economic data announcements: Nonfarm Payrolls, Unemployment Rate, Trade Balance at 8:30 a.m., Factory Orders, ISM Services number at 10:00 a.m. The S&P 500 futures contract trades within an intraday consolidation, following yesterday's move up. The nearest important support level is at around 2,100 mark, and the next support level is at 2,095, marked by previous local highs. There have been no confirmed negative signals so far. But will the market break above its short-term consolidation and continue last week's rally?

The technology Nasdaq 100 futures contract follows a similar path, as it fluctuates following yesterday's advance. The nearest important support level is at 4,500-4,520, marked by previous level of resistance. On the other hand, resistance level is at 4,530-4,550, as we can see on the 15-minute chart:

Concluding, the broad stock market bounced off following an intraday move down yesterday. The S&P 500 index remains close to 2,100 mark. 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 - yesterday'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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