Briefly: In our opinion, no speculative positions are justified.

Our intraday outlook is neutral, and our short-term outlook is neutral. Our medium-term outlook remains bearish, as the S&P 500 index extends its lower highs, lower lows sequence. We decided to change our long-term outlook to neutral recently, following a move down below medium-term lows:

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

The main U.S. stock market indexes gained 1.0-1.3% on Thursday, extending their short-term uptrend, as investors reacted to oil prices increase, economic data announcements, among others. The S&P 500 index broke above its early February local high of 1,947.20. the nearest important level of support is at around 1,940-1,950. On the other hand, resistance level is at 1,980-2,000, marked by previous support level. There have been no confirmed short-term negative signals so far. Is this still just a correction following January sell-off or a new uptrend? Last year's August - September lows continue to act as medium-term support level, as we can see on the daily chart:

Expectations before the opening of today's trading session are positive, with index futures currently up 0.7-0.9%. The European stock market indexes have gained 1.2-2.0% so far. Investors will now wait for series of economic data releases: GDP - Second Estimate, Personal Income, Personal Spending, Core PCE Prices number at 8:30 a.m., Michigan Sentiment at 10:00 a.m. The S&P 500 futures contract trades within an intraday uptrend, as it extends its yesterday's move up. The nearest important level of resistance is at around 1,970-1,980, marked by some previous local lows. On the other hand, support level is at 1,950, marked by previous resistance level. 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 trades within an intraday uptrend. The nearest important level of resistance is at around 4,300 mark, and support level is at 4,240-4,250, marked by previous level of resistance. There have been no confirmed negative signals so far. There are some overbought conditions, as the 15-minute chart shows:

Concluding, the broad stock market extended its short-term uptrend yesterday, as the S&P 500 index broke above the early February local high of 1,947.20. The index continues to trade along last year's August - September local lows, as they act as medium-term level of support. There have been no confirmed short-term negative signals so far. However, we can see overbought conditions. We prefer to be out of the market, avoiding low risk/reward ratio trades. 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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