Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,060 and profit target at 1,940, S&P 500 index)

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

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

The U.S. stock market indexes gained 1.3-1.6% on Thursday, extending their short-term uptrend, as investors reacted to economic data, quarterly corporate earnings releases, among others. The S&P 500 index got above the level of 2,000 again. The nearest important level of resistance is at around 2,020-2,050, marked by February - August consolidation. There have been no confirmed medium-term positive signals so far. It still looks like an upward correction following late August sell-off:

Expectations before the opening of today's trading session are virtually flat. The main European stock market indexes have gained 0.7-0.8% so far. Investors will now wait for some economic data announcements: Industrial Production, Capacity Utilization at 9:15 a.m., Michigan Sentiment number at 10:00 a.m. The S&P 500 futures contract (CFD) trades within an intraday consolidation following its yesterday's rally. The nearest important level of resistance is at around 2,020, and support level is at 2,000, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it trades along its yesterday's highs. The nearest important resistance level is at 4,430-4,440, marked by previous local high. On the other hand, support level is at 4,380-4,400, among others, as we can see on the 15-minute chart:

Concluding, the broad stock market extended its short-term uptrend on Thursday, as the &P 500 index broke above the level of 2,000 again. There have been no confirmed medium-term positive signals so far. It continues to look like a consolidation or a flat correction following late August sell-off. Therefore, we decided to open a speculative short position at the opening of today's trading session (S&P 500 index). We expect a downward correction or a short-term uptrend reversal. Stop-loss is at 2,060 and potential profit target is at 1,940. 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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