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

Our intraday outlook is 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 gained 0.2-0.4% on Thursday, extending their short-term move up, as investors awaited some further economic data announcements, Fed's Jackson Hole Conference. The S&P 500 index reached new all-time high at 1,994.76, as it got closer to the level of 2,000. The resistance level remains at around 1,990-2,000. On the other hand, the nearest important level of support is at 1,970, marked by some recent local lows, among others. There have been no confirmed negative signals so far. However, we can see negative technical divergences, accompanied by some overbought conditions:

Expectations before the opening of today’s session are slightly negative, with index futures currently down 0.2%. The European stock market indexes have lost 0.4-1.0% so far. Investors will now wait for a speech by Fed’s Janet Yellen at 10:00 a.m. The speech may give hints about future rate hikes. Therefore, it may be quite important at this point in time. The S&P 500 futures contract (CFD) trades slightly lower, following recent rally. The resistance level is at around 1,990-2,000. On the other hand, the support level remains at 1,975, marked by previous local extremes, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it continues to trade above the level of 4,000. The resistance level is at around 4,040-4,050, and the level of support remains at 4,030, marked by previous local lows, as the 15-minute chart shows:

Concluding, the broad stock market remains close to its all-time high. There have been no confirmed negative signals so far. However, there are some negative technical divergences, accompanied by short-term overbought conditions. In our opinion, no speculative positions are justified. We still prefer to be out of the market, just to avoid low risk/reward ratio trades. We will let you know when we think it is safe to get back in the market.

Thank you.

Paul Rejczak
Stock Trading Strategist
Stock Trading Alerts