Stock Trading Alert originally sent to subscribers on March 12, 2015, 6:46 AM.
Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,150 and profit target at 1,980, S&P 500 index)
Our intraday outlook is bearish, and our short-term outlook is bearish:
Intraday outlook (next 24 hours): bearish
Short-term outlook (next 1-2 weeks): bearish
Medium-term outlook (next 1-3 months): neutral
Long-term outlook (next year): bullish
The U.S. stock market indexes lost 1.7-1.9% on Tuesday, extending their short-term downtrend, as investors feared that the Fed will raise interest rates soon. Our yesterday's negative intraday outlook has proved accurate. The S&P 500 index is currently within its November-January consolidation, as it trades slightly below the level of 2,050. The nearest important support level is at around 2,020-2,030, marked by previous local highs. On the other hand, resistance level is at 2,065-2,070, among others. There have been no confirmed short-term positive signals so far. For now, it looks like a downward correction following February move-up:
Expectations before the opening of today's trading session are positive, with index futures currently up 0.3-0.4%. The main European stock market indexes have gained 0.2-1.9% so far. The S&P 500 futures contract (CFD) is in an intraday uptrend, as it retraces some of yesterday's decline. The nearest important support level remains at around 2,040-2,045, marked by yesterday's lows, as we can see on the 15-minute chart:
The technology Nasdaq 100 futures contract (CFD) bounced off slightly following yesterday's move down. The nearest important level of resistance is at around 4,350-4,360 and support level is at 4,325-4,330, among others, as the 15-minute chart shows:
Concluding, the broad stock market extended its short-term move down on Tuesday. We continue to maintain our speculative short position (opened on February 18 at 2,099.16, S&P 500 index), as we expect downward correction or an uptrend reversal. Stop-loss is at 2,150, and potential profit target is at 1,980. 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
Stock Trading Alerts
