Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,140 and profit target at 1,990, S&P 500 index)
Our intraday outlook is bearish, and our short-term outlook is bearish:
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): bullish
The U.S. stock market indexes lost 0.3-0.5% on Monday, retracing some of their recent move up, as investors took short-term profits off the table. The S&P 500 index continues to fluctuate below the level of 2,100. The next important level of resistance is at around 2,130, marked by late May all-time high. On the other hand, support level is at 2,070, marked by previous local low. The next important level of support is at 2,020-2,050. For now, it looks like a consolidation following October rally:
Expectations before the opening of today's trading session are positive, with index futures currently up 0.4-0.5%. The main European stock market indexes have been mixed so far. Investors will now wait for some economic data announcements: Construction Spending, ISM Index at 10:00 a.m. The S&P 500 futures contract (CFD) trades within an intraday consolidation, as it fluctuates along the level of 2,090. The nearest important level of resistance is at 2,100, and support level is at 2,080, as the 15-minute chart shows:
The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it currently trades slightly below the level of 4,700. The nearest important level of support remains at around 4,650, as we can see on the 15-minute chart:
Concluding, the broad stock market continued to fluctuate on Monday, following recent advance, as the S&P 500 index extended its short-term consolidation. Despite recent rally, there have been no confirmed positive signals so far. Therefore, we continue to maintain our speculative short position (2,088.35, S&P 500 index). Stop-loss is at 2,140 and potential profit target is at 1,990 (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
Stock Trading Alerts
