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 1.1-1.4% on Tuesday, extending their recent move down, as investors continued last week's selling following FOMC's rate decision release. The S&P 500 index broke below support level of 1,950. The next important level of support is at around 1,900-1,920. On the other hand, resistance level remains at around 2,000. There have been no confirmed positive signals so far. For now, it looks like a correction following late August sell-off:
Expectations before the opening of today's trading session are positive, with index futures currently up 0.3%. The main European stock market indexes have gained 0.7-1.4% so far. Investors will now wait for the Crude Inventories number release at 10:30 a.m. The S&P 500 futures contract (CFD) trades within an intraday uptrend, following yesterday's move down. The nearest important level of resistance is at 1,940-1,950, marked by previous local lows. On the other hand, support level remains at 1,900-1,910, as the 15-minute chart shows:
The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it retraces some of yesterday's decline. The nearest important level of resistance is at 4,300, and support level is at around 4,220, marked by local lows, as we can see on the 15-minute chart:
Concluding, the broad stock market continues its last week's decline on Tuesday, as investors' sentiment worsened considerably. There have been no confirmed positive signals so far. It looks like an upward correction within a medium-term downtrend. 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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