Stock Trading Alert originally sent to subscribers on September 24, 2014, 6:21 AM.
Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,030 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 gained 0.9-1.1% on Wednesday, retracing some of their recent move down, as investors hoped for the end of a short-term downward correction. The S&P 500 index got closer to the level of 2,000 again, as it bounced off the support level at 1,980-1,985. The nearest important level of resistance is at 2,000-2,020, marked by Friday’s all-time high of 2,019.26. The market continues to fluctuate within a month-long consolidation, as we can see on the daily chart:
Expectations before the opening of today’s session are virtually flat. The main European stock market indexes have been mixed so far. Investors will now wait for some economic data announcements: Initial Claims, Durable Orders at 8:30 a.m. The S&P 500 futures contract (CFD) is in a relatively narrow intraday trading range, following yesterday’s move up. The resistance level remains at around 2,000, and the nearest important level of support is at 1,965-1,970, marked by recent local lows, 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 4,030-4,035. The nearest important level of resistance is at around 4,090-4,100. The price remains within short-term consolidation:
Concluding, the broad stock market retraced its recent sell-off, as the S&P 500 index got closer to the level of 2,000. Based on my experience, medium-term divergences seem more important than the lack of clarity for the short term. We remain bearish, expecting a downward correction or uptrend reversal. Therefore, we continue to maintain our already profitable 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
Stock Trading Alerts
