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 were mixed between 0.0% and -0.9% on Tuesday, as investors continued to hesitate following recent volatile fluctuations. The S&P 500 index remains below the resistance level of 2,100. The next important resistance level is at around 2,130, marked by late May all-time high. On the other hand, support level is at 2,020-2,050, among others. For now, it looks like a consolidation following October rally:
Expectations before the opening of today's trading session are virtually flat, with index futures currently mixed between -0.1 and +0.2%. The main European stock market indexes have lost 0.1-0.3% so far. Investors will now wait for some economic data announcements: Wholesale Inventories at 10:00 a.m., Crude Inventories at 10:30 a.m. The S&P 500 futures contract (CFD) trades within an intraday downtrend, as it retraces yesterday's rebound. The nearest important level of support is at around 2,050, and resistance level is at 2,060-2,070, among others, as the 15-minute chart shows:
The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it currently trades along the level of 4,670. The nearest important level of resistance is at around 4,700. On the other hand, support level is at 4,640-4,650, as we can see on the 15-minute chart:
Concluding, the broad stock market continues to trade within a relatively volatile short-term consolidation, as the S&P 500 index trades below the level of 2,100. 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 (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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