Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,120, 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 0.6-0.7% on Monday, retracing some of their last week's decline, as investors' sentiment improved. The S&P 500 index bounced off resistance level at 2,100. It continues to trade within two-month long consolidation. The next important level of resistance remains at around 2,110-2,120, marked by local highs. On the other hand, support level is at 2,080-2,085, marked by recent consolidation. The next support level is at around 2,050-2,060. 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? Or will it reverse its over three-month long uptrend off medium-term support level at around 1,800?

Expectations before the opening of today's trading session are positive, with index futures currently up 0.4-0.5%. The European stock market indexes have gained 0.1-0.6% so far. The S&P 500 futures contract trades within an intraday uptrend, retracing its yesterday's decline. The nearest important level of resistance is at around 2,085-2,090. On the other hand, support level is at 2,070, marked by yesterday's local low, among others, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract follows a similar path, as it retraces some of its yesterday's move down. The nearest important level of resistance is at around 2,430-2,450, marked by previous local highs. On the other hand, support level remains at 4,350-4,440, as the 15-minute chart shows:

Concluding, the broad stock market extends its two-month long consolidation, as the S&P 500 index trades along the level of 2,100. There have been no confirmed negative signals so far. However, we continue to maintain our speculative short position (opened on June 1 at 2,093.94 - S&P 500 index), as we expect a downward correction or uptrend reversal. Our stop-loss level remains at 2,120, and 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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