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

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 lost between 2.1% and 2.3% on Monday, extending their recent selloff. Investors reacted negatively to worse-than expected ISM Index announcement. The S&P 500 index broke sharply below the support at around 1,775, which is a negative signal. The index is the lowest since last October, with the nearest possible level of support at around 1,730, marked by last September’s local high. On the other hand, the nearest resistance is at 1,745-1,750:

Expectations before the opening of today’s session are slightly positive, with index futures currently up 0.2-0.3%. However, the European stock market indexes have lost 0.3-1.0%. Investors will now wait for the Factory Orders data announcement at 10:00 a.m. The S&P 500 futures contract (CFD) trades in a relatively narrow range, following yesterday’s selloff. The nearest resistance is at 1,745-1,750. For now, it looks like a flat correction within a short-term downtrend, however some sort of a “dead cat bounce” cannot be excluded here. The next resistance is at around 1,765, marked by the recent local lows, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract (CFD) is in a similar intraday consolidation, following sharp decline. The resistance is at around 3,460-3,470, with a potential support at 3,420-3,430, as the 15-minute chart shows:

Thank you.

Paul Rejczak
Stock Trading Strategist
Stock Trading Alerts