Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,030 and a 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 lost between 0.6% and 0.8% on Tuesday, as investors took some profits off the table following an Apple new product launch event. The S&P 500 index is the lowest since late August, as it trades below the level of 2,000. The resistance level remains at around 2,000-2,010, marked by all-time high of 2,011.17, among others. On the other hand, the nearest level of support is at 1,985, and the next support level is at 1,970, marked by Fibonacci’s 38.2% retracement of August rally. The index is in a downward correction following recent move up, as we can see on the daily chart:

Expectations before the opening of today’s session are virtually flat, with index future currently up 0.1%. The main European stock market indexes have been mixed so far. Investors will now wait for the Whole Inventories number release at 10:00 a.m. The S&P 500 futures contract (CFD) is slightly below its recent trading range. The nearest important level of resistance remains at around 2,000-2,010, and the support level is at 1,980, among others:

The technology Nasdaq 100 futures contract (CFD) trades close to its recent local lows, testing the support level of 4,050-4,060. On the other hand, the level of resistance remains at around 4,080-4,100, among others, as the 15-minute chart shows:

Concluding, the broad stock market retraced some of its month-long advance as the S&P 500 index broke below the level of 2,000. We remain bearish, expecting a downward correction or uptrend reversal. Therefore, we continue to maintain our speculative short position with entry point at 2,000.5 (S&P 500 index). The stop-loss is at the level of 2,030 and potential profit target is 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
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