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

Our intraday outlook remains neutral, and our short-term outlook is neutral:

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 U.S. stock market indexes lost between 0.2% and 0.5% on Tuesday, extending their short-term consolidation, as investors continued to hesitate ahead of economic data announcements, quarterly earnings releases, geopolitical developments. The S&P 500 index broke below its upward trend line, which is negative. However, there is still no clear short-term direction, as the index fluctuates relatively close to its all-time high of 1,991.39. The resistance level is at around 1,990-2,000. On the other hand, the level of support remains at 1,950-1,970. For now, it looks like a flat correction within a long-term uptrend, however, a downward correction cannot be excluded here:

Expectations before the opening of today’s session are positive, with index futures currently up 0.2-0.3%. The main European stock market indexes have been virtually flat so far. Investors will now wait for some key economic data announcements: ADP Employment Change report at 8:15 a.m., U.S. GDP at 8:30 a.m., FOMC Rate Decision at 2:00 p.m. Investors will particularly focus on the GDP data release, following GDP’s first quarter decline of 2.9%. The ADP report release will be watched closely too, before Friday’s monthly jobs report announcement. The S&P 500 futures contract (CFD) trades close to the support level of 1,960, marked by recent local lows. On the other hand, the level of resistance remains at around 1,980-1,985, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract (CFD) extends its short-term consolidation, as it trades slightly below long-term highs. The resistance level is at around 3,980-4,000, and the nearest important level of support is at 3,930, marked by Monday’s local low. There have been no confirmed negative signals so far, as the 15-minute chart shows:

Concluding, the broad stock market remains in a short-term consolidation, still quite close to its all-time high. Investors wait for some key economic data announcements, which may lead to a new short-term trend. There have been no confirmed negative signals so far. We think that it is better to stay out of the market at this moment, avoiding low risk/reward ratio trades, and 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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