Briefly: In our opinion speculative long positions are favored (with stop-loss at 1,850, S&P 500 index)

Our intraday outlook is bullish, and our short-term outlook remains neutral:

Intraday (next 24 hours) outlook: bullish
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 between 0.5% and 0.8% on Monday, as investors decided to buy stocks ahead of today’s FOMC Rate Decision announcement, Friday’s employment report release, among others. Our yesterday’s bullish intraday outlook has been right. However, the broad market remains within its recent trading range. The S&P 500 index trades slightly below crucial resistance level at 1,880-1,900, marked by the April 4 all-time high of 1,897.28 and some of the previous local highs. The support remains at around 1,850. The situation looks bullish, however, our current long position may be considered only as speculative. There is no clear medium-term direction, as we can see on the daily chart:

Expectations before the opening of today’s session are slightly negative, with index futures currently down 0.1-0.4%. The main European stock market indexes have been mixed between +0.1% and -0.3% so far. Investors will now wait for series of economic data announcements: ADP Employment Change at 8:15 a.m., GDP – advance number at 8:30 a.m., Chicago PMI at 9:45 a.m., and finally the above-mentioned FOMC Rate Decision at 2:00 p.m. The S&P 500 futures contract (CFD) trades within its week-long consolidation, as it is below the level of resistance at 1,875-1,880. On the other hand, the support is at 1,845-1,850, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract (CFD) remains in a similar consolidation, however, further away from its long-term highs. The nearest important resistance is at around 3,580-3,600, and the support is at 3,480-3,500, marked by the recent intraday lows:

Concluding, the broad stock market continues to fluctuate, as it is close to consolidation’s local highs. Will it break above these resistance levels? Still tough to answer, however, the current week’s economic announcements may bring some increased volatility. Thus, only speculative long positions are justified at this moment.

Thank you.

Paul Rejczak
Stock Trading Strategist
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