Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,140 and profit target at 1,990, S&P 500 index)

Our intraday outlook is 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 lost 0.1-0.2% on Thursday, as investors hesitated following recent advance. The S&P 500 index continues to trade within its February - August consolidation. The nearest important resistance level is at 2,100-2,130, marked by long-term highs. On the other hand, support level remains at 2,020-2,050, among others. There have been no confirmed negative signals so far. However, we can see overbought conditions:

Expectations before the opening of today's trading session are virtually flat. The main European stock market indexes have lost 0.2-0.3% so far. Investors will now wait for some economic data announcements: Personal Income, Personal Spending, PCE Prices - Core, Employment Cost Index at 8:30 a.m., Chicago PMI at 9:45 a.m., Michigan Sentiment at 10:00 a.m. The S&P 500 futures contract (CFD) trades within an intraday downtrend, as it retraces its overnight rally. The nearest important resistance level is at 2,090-2,100, and support level is at 2,070, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it retraces overnight rally. The nearest important level of resistance is at 4,680-4,700. and support level is at 4,650, among others, as we can see on the 15-minute chart:

Concluding, the broad stock market slightly extended its short-term uptrend yesterday, before closing lower. There have been no confirmed short-term negative signals so far. However, we can see overbought conditions. We expect a downward correction or short-term uptrend reversal. Therefore, we continue to maintain our speculative short position (2,088.35, S&P 500 index). Stop-loss is at 2,140 and potential profit target is at 1,990. 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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