Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,150 and profit target at 1,980, S&P 500 index)
Our intraday outlook is now 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): neutral
Long-term outlook (next year): bullish
The U.S. stock market indexes were mixed between 0.0% and +0.2% on Tuesday, slightly extending their recent move up, as investors remained uncertain following last week's rally. Our yesterday's neutral intraday outlook has proved accurate. The S&P 500 index has managed to reach yet another new all-time high at the level of 2,101.30. The nearest important resistance level remains at around 2,100. On the other hand, level of support is at 2,070-2,080, marked by some previous local highs. There have been no confirmed negative signals so far, however, we can see overbought conditions accompanied by negative technical divergences:
Expectations before the opening of today's trading session are virtually flat. The main European stock market indexes have been mixed so far. Investors will now wait for series of economic data announcements: Housing Starts, Building Permits, Producer Price Index at 8:30 a.m., Industrial Production, Capacity Utilization at 9:15 a.m., FOMC Minutes release at 2:00 p.m. The S&P 500 futures contract (CFD) is in an intraday consolidation, following recent advance. The nearest important resistance level is at around 2,100, as we can see on the 15-minute chart:
The technology Nasdaq 100 futures contract (CFD) extends its short-term fluctuations, as it trades along the level of 4,380. The nearest important level of resistance is at 4,400. On the other hand, support level is at 4,360-4,370, among others, as the 15-minute chart shows:
Concluding, the broad stock market extended its short-term fluctuations on Tuesday, following last week's rally. There have been no confirmed negative signals. However, we decided to open a speculative short position at the open of today's trading session (S&P 500 index). We expect a downward correction or an uptrend reversal. Stop-loss is at 2,150, and potential profit target is at 1,980.
Thank you.
Paul Rejczak
Stock Trading Strategist
Stock Trading Alerts
