Briefly: In our opinion speculative long positions are still favored (with stop-loss at 1,925, S&P 500 index).
Our intraday outlook remains neutral, and our short-term outlook is now neutral, following yesterday’s reversal:
Intraday
(next 24 hours) outlook: neutral
Short-term (next 1-2 weeks) outlook: neutral
Medium-term (next 1-3 months) outlook: neutral
Long-term outlook (next year): bullish
The main U.S. stock market indexes lost between 0.2% and 0.7% yesterday, retracing some of their recent move up, as investors took profits off the table, selling stocks despite better-than-expected economic data releases. However, the S&P 500 index managed to reach yet another new all-time high of 1,968.17. The nearest important resistance remains at around 1,960-1,970. On the other hand, the support level is at 1,940, marked by the recent consolidation, and the next support is at 1,915-1,925. For now, it looks like a correction within an uptrend. There have been no confirmed trend reversal signals so far:
Expectations before the opening of today’s session are slightly positive, with index futures currently up 0.1%. The European stock market indexes have lost 0.5-0.6% so far. Investors will now wait for some economic data announcements: MBA Mortgage Index at 7:00 a.m., Durable Goods, GDP – Third Estimate at 8:30 a.m. The S&P 500 futures contract (CFD) trades below its recent consolidation, following a quick but short-lived move to new long-term high. The nearest important support level is at around 1,940. On the other hand, the level of resistance is at 1,950, among others, as we can see on the 15-minute chart:
The technology Nasdaq 100 futures contract (CFD) followed a similar path, reaching new long-term high slightly below the level of 3,830. The nearest important support level is at 3,780-3,785, and the resistance is at around 3,800, as the 15-minute chart shows:
Concluding, the broad stock market is in a consolidation, following month-long rally. We remain cautiously optimistic, maintaining our already profitable long position. However, we moved our stop-loss (protect-gain in this case) up a bit, to the level of 1,925 – S&P 500 index.
Thank you.
Paul Rejczak
Stock Trading Strategist
Stock Trading Alerts
