Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,140, and profit target at 2,100, S&P 500 index).

Our intraday outlook is now 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 were mixed between -0.1% and +0.3% on Thursday, as investors hesitated following recent rally. The S&P 500 index continues to trade close to the level of 2,100. The nearest important level of resistance is at around 2,110-2,120, marked by last month's local highs. The next resistance level is at 2,130-2,135, marked by last year's all-time high of 2,134.72. On the other hand, support level is at around 2,080-2,085, marked by previous level of resistance, and the next level of support is at 2,050-2,070. Last year's highs along the level of 2,100 continue to act as medium-term resistance level. Is this some long-term topping pattern or just medium-term consolidation following a rebound off February low?

Expectations before the opening of today's trading session are positive, with index futures currently up 0.1-0.2%. The European stock market indexes have been mixed so far. Investors will now wait for the monthly employment data release: Nonfarm Payrolls, Unemployment Rate at 8:30 a.m. The S&P 500 futures contract trades within an intraday consolidation, as it continues to fluctuate along the level of 2,100. The nearest important level of resistance is at around 2,100-2,150. On the other hand, support level remains at 2,080, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract follows a similar path, as it currently trades within an intraday consolidation following recent rally. The nearest important level of resistance is at 4,460-4,470. On the other hand, support level is at 4,430-4,450, marked by some local lows. For now, it looks like a consolidation following short-term uptrend, as the 15-minute chart shows:

Concluding, the broad stock market extended its short-term consolidation yesterday, as the S&P 500 index remained close to 2,100 mark, ahead of today's monthly employment data release. We still can see short-term overbought conditions accompanied by bearish technical divergences. Therefore, we continue to maintain our speculative short position (opened at around 2,092 - Tuesday's average 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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