Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,210, and profit target at 2,050, S&P 500 index).

Our intraday outlook is bearish, and our short-term outlook is bearish. Our medium-term outlook is neutral, following S&P 500 index breakout above last year's all-time high:

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

The U.S. stock market indexes gained 0.5-0.8% on Thursday, extending their short-term uptrend, as investors continued to react to Wednesday's Rate Decision release. The S&P 500 index got closer to its July - August highs, following a breakout above resistance level of 2,170, marked by the daily gap down of 2,169.08-2,177.49. The nearest important level of resistance is at around 2,185-2,195, marked by the all-time high of 2,193.81, among others. On the other hand, support level is at 2,165-2,170, marked by yesterday's daily gap up. The next important support level is at around 2,150, marked by previous level of resistance. Is this a new uptrend or just upward correction following the early September move down?

Expectations before the opening of today's trading session are slightly negative, with index futures currently down 0.1-0.2%. The European stock market indexes have lost 0.1-0.5% so far. The S&P 500 futures contract trades within an intraday consolidation, following recent rally. There have been no confirmed negative signals so far. The nearest important resistance level is at around 2,170, marked by local high. On the other hand, support level is at around 2,150-2,155, marked by previous consolidation, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract is relatively stronger than the broad stock market, as it continues trade close to new all-time highs. The nearest important support level is at around 4,850-4,860, marked by previous level of resistance. The nearest important resistance level is at 4,900 mark. There have been no confirmed negative signals so far. However, we can see short-term overbought conditions:

Concluding, the broad stock market continued its short-term uptrend yesterday, as the S&P 500 index retraced more of its early September decline. There have been no confirmed negative signals so far. However, we continue to maintain our speculative short position (opened on July 18th at 2,162, S&P 500 index). Stop-loss level is at 2,210 and potential profit target is at 2,050 (S&P 500 index). 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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