Briefly: In our opinion, speculative long positions are favored (with stop-loss at 1,810, and profit target at 2,020, S&P 500 index)
Our intraday outlook is now bullish, and our short-term outlook is bullish:
Intraday outlook (next 24 hours): bullish
Short-term outlook (next 1-2 weeks): bullish
Medium-term outlook (next 1-3 months): bearish
Long-term outlook (next year): bullish
The main U.S. stock market indexes lost 1.9-2.9% on Monday, extending their recent sell-off, as investors reacted to global exchanges declines. The S&P 500 index broke below the level of 1,900. The nearest important level of support is at around 1,870, marked by late August low. On the other hand, resistance level is at around 1,900-1,920. There have been no confirmed positive signals so far. However, we can see some short-term oversold conditions:
Expectations before the opening of today's trading session are slightly positive, with index futures currently up 0.4%. The European stock market indexes have been mixed so far. Investors will now wait for some economic data announcements: Case-Shiller 20-city Index at 9:00 a.m., Consumer Confidence at 10:00 a.m. The S&P 500 futures contract (CFD) trades within an intraday consolidation, following yesterday's decline. The nearest important level of support is at around 1,860, and resistance level is at 1,880-1,900, as the 15-minute chart shows:
The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it bounces slightly following yesterday's sell-off. The nearest important level of support is at around 4,060, marked by local low, and resistance level is at 4,150-4,200, among others, as we can see on the 15-minute chart:
Concluding, the broad stock market extended its short-term downtrend yesterday. There have been no confirmed positive signals so far. However, we decided to open a speculative long position at the open of today's trading session (S&P 500 index). We expect an upward correction or a downtrend reversal. Stop-loss is at 1,810, and potential profit target is at 2,020. 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
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