Briefly: In our opinion, no speculative positions are justified
Our intraday outlook is 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 lost 0.3-0.7% on Tuesday, as investors reacted to economic data, quarterly corporate earnings releases. However, the S&P 500 index remained above the level of 2,000, as it extended its short-term consolidation following recent rebound. The nearest important level of resistance is at around 2,020, and support level is at 1,970-2,000. There have been no confirmed medium-term positive signals so far. It still looks like a correction following late August sell-off:
Expectations before the opening of today's trading session are virtually flat, with index futures currently down 0.1%. The European stock market indexes have lost 0.6-0.9% so far. Investors will now wait for some economic data announcements: Producer Price Index, Retail Sales at 8:30 a.m., Business Inventories at 10:00 a.m., Fed's Beige Book release at 2:00 p.m. The S&P 500 futures contract (CFD) trades within an intraday consolidation, following yesterday's decline. The nearest important level of resistance is at around 2,000, and support level is at 1,970, marked by previous local lows, as the 15-minute chart shows:
The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it trades within a consolidation along the level of 4,330. The nearest important level of support is at 4,300-4,320, and resistance level is at 4,360-4,380, marked by recent local highs, as we can see on the 15-minute chart:
Concluding, the broad stock market declined on Tuesday, as investors awaited quarterly corporate earnings releases, among others. 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. Our late September long position (1,881.9 S&P 500) has been closed at the level of 2,013.73 on Friday. Overall, we gained around 131.83 index points on that trade. 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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