Briefly:

Intraday trade: Our Wednesday's intraday outlook was neutral. The S&P 500 index lost 0.7% after opening virtually flat. The stock market will likely retrace some of its yesterday's decline today. But there is a close resistance level at around 2,640-2,650. Therefore, we prefer to be out of the market, avoiding low risk/reward ratio trades.

Medium-term trade: In our opinion, no medium-term positions are justified.

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

Intraday outlook (next 24 hours): neutral
Short-term outlook (next 1-2 weeks): neutral
Medium-term outlook (next 1-3 months): neutral

Today's Stock Trading Alert will be shortened, we apologize for inconvenience.

The U.S. stock market indexes lost 0.4-0.7% on Wednesday, extending their short-term fluctuations, as investors reacted to the FOMC Statement announcement. It outweighed a positive investors' reaction to Tuesday's quarterly earnings release from Apple. The S&P 500 index trades 8.3% below January 26 record high of 2,872.87. The Dow Jones Industrial Average lost 0.7% and the technology Nasdaq Composite lost 0.4% on Tuesday, as it was relatively slightly stronger than the broad stock market.

The broad stock market continues its medium-term consolidation following late January - early February sell-off. There are still two possible medium-term scenarios. There is also a chance that the market will just go sideways for some time, and that would be positive for bulls in the long run (some extended flat correction):

Apple After Earnings Release

Let's take a look at Apple, Inc. stock (AAPL) daily chart (chart courtesy of http://stockcharts.com). It was gaining ahead of Tuesday's quarterly earnings releases, and it rallied after the fact.  On Tuesday we wrote, that "we will likely see a more clear reaction. Probably to the upside, as there seems to be some "sell the rumor, buy the fact" action going on". And we were right! Potential level of resistance is now at around $175-180:

The S&P 500 index will probably open slightly higher today and it may retrace some of its yesterday's move down. Will it reverse upwards from here? It's hard to say. For now, it is just a short-term consolidation.

Currently, we prefer to be out of the market, avoiding low risk/reward ratio medium-term trades. We will let you know when we think it is safe to get back in the market.

To summarize: no medium-term positions are justified from the risk/reward perspective at this moment.

Intraday trade:

No intraday position is justified from the risk/reward perspective today.

No medium-term position is justified from the risk/reward perspective at this moment.

Thank you.

Paul Rejczak
Stock Trading Strategist
Stock Trading Alerts