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 Thursday, following a volatile trading session, as investors remained uncertain ahead of today’s monthly jobs report release, among others. The S&P 500 index has managed to reach yet another new all-time high at the level of 2,077.34. The nearest important resistance level is at 2,085-2,100. On the other hand, support level is at 2,060-2,065, marked by recent local lows. There have been no confirmed negative signals so far, however, we still can see overbought conditions accompanied by negative divergences:

Expectations before the opening of today’s trading session are virtually flat, with index futures currently up 0.1%. The main European stock market indexes have gained 0.6-1.2% so far. Investors will now wait for economic data announcements: Nonfarm Payrolls, Unemployment Rate, Trade Balance at 8:30 a.m., Factory Orders at 10:00 a.m. The S&P 500 futures contract (CFD) trades close to its all-time high, as it moves along the level of 2,070. Resistance level is at 2,070-2,075. On the other hand, the nearest important level of support is at around 2,060, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it extends its fluctuations above the level of 4,300. The nearest important level of resistance is at around 4,330-4,350, as the 15-minute chart shows:

Concluding, the broad stock market slightly extended its long-term uptrend, as it made another new record high yesterday. There have been no confirmed negative signals so far. However, we still 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
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