Our intraday outlook is now neutral, following two days of decline and profitable trades, and our short-term outlook remains neutral:

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

The U.S. stock market indexes lost 2.0-2.1% on Friday, as market sentiment worsened considerably, following fears on global economic outlook and high stock valuations. The S&P 500 index sold off into the November-December consolidation, breaking below the support at around 1,800-1,810. It certainly looks negative, as we can see a double top pattern with the neckline at around 1,815. However, for now, it looks like a correction within a long-term uptrend. The nearest important support is at 1,775, marked by the October-November consolidation:

Expectations before the opening of today’s session are virtually flat, as investors hesitate following Friday’s selloff. The index futures are mixed between -0.1% and +0.1%. The main European stock market indexes have lost 0.3-1.6% so far. Investors will now wait for the New Home Sales number announcement at 10:00 a.m. The S&P 500 futures contract (CFD) trades near its Friday’s closing price, rebounding slightly off an intraday low at around 1,775. There are no short-term downtrend reversal signals yet, as it only looks like an upward correction. The nearest important resistance seems to be at 1,795-1,800, as we can see on the 15-minute chart:

Analogously, the Nasdaq 100 futures contract (CFD) bounced off an intraday low at around 3,520. Will this rebound hold? For now it looks like a correction within a downtrend, some sort of a “dead cat bounce”. The nearest support remains at around 3,520, and the resistance is at 3,550-3,570, as the 15-minute chart shows:

Thank you.

Paul Rejczak
Stock Trading Strategist
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