Briefly: In our opinion short positions are still favored (stop-loss at 1,850, short-term profit target at around 1,800, S&P 500 index), and they have been already profitable.

Our intraday outlook is now neutral, as the market may consolidate after selling off recently, and our short-term outlook remains bearish, following breakdown below March-April consolidation:

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

The main U.S. stock market indexes lost between 0.9% and 1.2% on Friday, extending their recent move down, as investors continued to sell stocks, worried by the geopolitical risk of Russia-Ukraine conflict, among others. The S&P 500 index is in a short-term downtrend, below its March consolidation. The resistance remains at 1,840-1,850, marked by previous support. On the other hand, a potential level of support is at around 1,800-1,810. The next support is at 1,775, marked by some of the 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 0.2-0.3%. The European stock market indexes have lost 0.6-0.7% so far. Investors will now wait for some economic data announcements: Retail Sales number at 8:30 a.m., Business Inventories at 10:00 a.m. The S&P 500 futures contract (CFD) remains in a short-term downtrend, extending last week’s move down. There have been no confirmed downtrend reversal signals so far. However, the market is close to the psychological support of 1,800. The resistance is at around 1,825-1,830, marked by Friday’s local highs, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract (CFD) has extended its short–term downtrend, breaking below the psychological level of 3,500. The resistance is at around 3,480-3,500. On the other hand, a potential support is at around 3,400-3,420, marked by the early February local lows. There have been no confirmed positive signals so far:

Concluding, the market remains in a short-term downtrend, however, it may consolidate for some time, following last week’s sharp selloff.

Thank you.

Paul Rejczak
Stock Trading Strategist
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