Briefly: In our opinion, no speculative positions are justified.
Our intraday outlook remains neutral, and our short-term outlook is 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 main U.S. stock market indexes lost 0.1-0.3% on Tuesday, extending their recent fluctuations, as investors remained uncertain following oil prices crash, among others. The S&P 500 index is in a medium-term consolidation, as it remains above the level of 2,000. The nearest important support level is at around 1,990-2,000, marked by recent local lows. On the other hand, level of resistance is at 2,055-2,066, marked by local highs, as we can see on the daily chart:
Expectations before the opening of today’s session are negative, with index futures currently down 0.2-0.3%. The European stock market indexes have lost 0.3-1.5% so far. Investors will now wait for some economic data announcements: Retail Sales at 8:30 a.m., Business Inventories at 10:00 a.m., Fed’s Beige Book release at 2:00 p.m. The S&P 500 futures contract (CFD) is in an intraday consolidation, following yesterday’s move down. The nearest important support level is at around 1,995-2,000, marked by local lows. On the other hand, resistance level remains at 2,020, as the 15-minute chart shows:
The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it trades along the level of 4,150. The nearest important support level is at 4,080-4,100, among others. There is no clear short-term direction, however, we can see some weakness here:
Concluding, the broad stock market extended its recent fluctuations, as it remained within medium-term consolidation. For now, it looks like a volatile medium-term consolidation following last year’s October-November rally. We prefer to be out of the market, avoiding low risk/reward ratio trades. We will let you know when we think it is safe to get back in the market.
Thank you.
Paul Rejczak
Stock Trading Strategist
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