Briefly: In our opinion, speculative short positions are favored (with stop-loss at 1,985 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 lost 1.8-2.1% on Thursday, as investors’ sentiment worsened once again. Our yesterday’s bearish intraday outlook has proved accurate. The S&P 500 index extends its volatile short-term consolidation, fluctuating along the level of 1,950. The level of resistance remains at around 1,970-1,980, marked by recent local highs. On the other hand, the support level is at 1,925, and the next support level is at 1,900. For now, it looks like a consolidation within short-term downtrend, as we can see on the daily chart:
Expectations before the opening of today’s trading session are negative, with index futures currently down 0.4-0.9%. The main European stock market indexes have lost 1.4-2,.0% so far. The S&P 500 futures contract (CFD) is in an intraday consolidation, following yesterday’s sell-off. The nearest important level of resistance is at around 1,925-1,930, and the support level is at 1,910, among others:
The technology Nasdaq 100 futures contract (CFD) extended its recent move down, as it broke below the level of 3,940. The level of resistance is at around 3,960-3,970, marked by local high. Potential support level is at 3,900-3,920:
Concluding, the broad stock market continues to fluctuate following late September – early October move down. For now, it looks like a flat correction within a downtrend. We remain bearish, expecting some more downside. 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 1,985. Potential profit target remains 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
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