Briefly: In our opinion, speculative short positions are favored (with stop-loss at 1,985 and profit target at 1,900, S&P 500 index)
Our intraday outlook is bearish, and our short-term outlook is bearish:
Intraday
(next 24 hours) outlook: bearish
Short-term (next 1-2 weeks) outlook: bearish
Medium-term (next 1-3 months) outlook: neutral
Long-term outlook (next year): bullish
The U.S. stock market indexes closed virtually flat on Thursday, following a quite volatile trading session as investors reacted to some economic data announcements. The S&P 500 index has deepened its short-term downtrend, testing the support of 1,930, marked by July-August consolidation. The nearest important level of resistance is at around 1,950, marked by local highs, as we can see on the daily chart:
Expectations before the opening of today’s session are positive, with index futures currently up 0.4-0.5%. The main European stock market indexes have gained 0.7-0.8% so far. Investors will now wait for some important economic data releases: Nonfarm Payrolls, Unemployment Rate, Trade Balance at 8:30 a.m., ISM Services number at 10:00 a.m. Investors will especially look to the monthly jobs data announcement. The S&P 500 futures contract (CFD) bounced off the support level at around 1,920, as it currently trades along yesterday’s pre-market levels. The level of resistance is at around 1,950, among others, as the 15-minute chart shows:
The technology Nasdaq 100 futures contract (CFD) followed a similar path, as it bounced off the support level of 3,930. The nearest important level of resistance is at 4,000, marked by previous local lows, among others:
Concluding, the broad stock market extended its short-term downtrend, moving closer to July-August consolidation, before bouncing off. We remain bearish, expecting some more downside. We continue to maintain our already profitable speculative short position with entry point at 2,000.5 – S&P 500 index. We decided to move our stop-loss to the level of 1,985, marked by some important resistance levels. Potential profit target remains at 1,900 (S&P 500 index). 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
