Briefly: In our opinion, no speculative positions are justified.
Our intraday outlook is now neutral, and our short-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): bearish
Long-term outlook (next year): bullish
The U.S. stock market indexes gained 0.7-1.0% on Monday, as investors hunted bargains following last week's decline. The S&P 500 index bounced off support level of 2,000. The nearest important level of resistance is at around 2,040-2,050, marked by previous local lows. For now, it looks like a medium-term consolidation following October rally. There have been no confirmed negative signals so far. However, the index remains relatively weak, as it currently trades below February-August consolidation:
Expectations before the opening of today's trading session are slightly positive, with index futures currently up 0.1-0.2%. The main European stock market indexes have been mixed so far. Investors will now wait for some economic data announcements: GDP - Third Estimate number at 8:30 a.m., Existing Home Sales at 10:00 a.m. The S&P 500 futures contract trades within an intraday consolidation, following yesterday's rebound. The nearest important level of resistance is at around 2,020. On the other hand, support level is at 1,990-2,000, as the 15-minute chart shows:
The technology Nasdaq 100 futures contract follows a similar path, as it retraces some of its yesterday's move up. The nearest important level of resistance is at around 4,580-4,600, and support level remains at 4,500, among others, as we can see on the 15-minute chart:
Concluding, the broad stock market bounced off on Monday, as it retraced some of its last week's move down. It continues to trade within two-month long consolidation so far. We prefer to be out of the market, avoiding 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
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