Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,085 and profit target at 1,950, S&P 500 index).
Our intraday outlook is bearish, and our short-term outlook is bearish:
Intraday
(next 24 hours) outlook: bearish
Short-term (next 1-2 weeks) outlook: bearish
Medium-term (next 1-3 months) outlook: neutral
Long-term outlook (next year): bullish
The U.S. stock market indexes were virtually flat on Monday, extending their recent fluctuations as investors remained uncertain following October – November rally. The S&P 500 index trades close to last week’s all-time high of 2,046.18. The nearest important level of resistance is at around 2,040-2,050. On the other hand, support level is at 2,020-2,025, marked by some previous resistance levels, among others. There have been no confirmed negative signals so far. For now, it looks like a flat correction within an uptrend. However, some sort of a topping consolidation pattern cannot be excluded here:
Expectations before the opening of today’s trading session are virtually flat. The main European stock market indexes have gained 0.4-0.8% so far. Investors will now wait for some economic data announcements: Producer Price Index at 8:30 a.m., NAHB Housing Market Index at 10:00 a.m. The S&P 500 futures contract (CFD) extends its short-term consolidation, as it trades along the level of 2,040. The nearest important resistance level is at around 2,040-2,045, and support level remains at 2,025-2,030, among others, as we can see on the 15-minute chart:
The technology Nasdaq 100 futures contract (CFD) continues to trade along the level of 4,200. The level of resistance is at around 4,220, and the nearest important support level is at 4,190-4,200. For now, it looks like a flat correction within a short-term uptrend, as the 15-minute chart shows:
Concluding, the broad stock market remains close to all-time highs, as it extends recent fluctuations. We expect a downward correction or an uptrend reversal. Therefore, we continue to maintain our speculative short position. Stop-loss is at 2,085 and potential profit target is at 1,950 (S&P 500 index). 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
Stock Trading Alerts
