Briefly: In our opinion, no speculative positions are justified.

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

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

The main U.S. stock market indexes were mixed between -0.2% and +0.4% on Wednesday, extending their short-term consolidation, as investors reacted to some important economic data announcements, quarterly earnings releases, FOMC Rate Decision release. Our yesterday’s neutral intraday outlook has proved accurate. The S&P 500 index remains in a month-long consolidation, below its upward trend line, which is negative. However, there have been no confirmed negative signals so far. The level of resistance is at around 1,990-2,000, marked by July 24 all-time high of 1,991.39. On the other hand, the support level is at 1,950-1,970, marked by previous local lows, as we can see on the daily chart:

Expectations before the opening of today’s session are negative, with index futures currently down 0.5-0.6%. The European stock market indexes have lost 0.2-0.8% so far. Investors will now wait for some economic data announcements: Challenger Job Cuts report at 7:30 a.m., Initial Claims, Employment Cost Index at 8:30 a.m., Chicago PMI at 9:45 a.m. The Chicago PMI report release for the month of July is supposed to be the most important of today’s announcements, as it measures manufacturing and corresponding businesses’ performance for a given month. The S&P 500 futures contract (CFD) is in an intraday downtrend, as it trades below the level of support at around 1,960. The nearest important support level is at 1,945-1,950, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it trades below its recent consolidation. The nearest important support level is at around 3,930-3,940, marked by Monday’s local lows. On the other hand, the level of resistance is at 3,950-3,960, among others:

Concluding, the broad stock market extends its short-term consolidation, as the S&P 500 index trades along the level of 1,960-1,980. There have been no confirmed negative signals so far. However, a downward correction cannot be excluded here. We think that it is better to stay out of the market at this time, 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
Stock Trading Alerts