Briefly: In our opinion, no speculative positions are justified.
Our intraday outlook is 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 gained between 0.3% and 1.3% on Thursday, extending their recent move up, as investors reacted to better-than-expected quarterly GDP number announcement, among others. The S&P 500 index got closer to the level of 2,000. The nearest important level of resistance is at 2,000-2,020, marked by the September 19th all-time high of 2,019.26. There have been no confirmed negative signals so far, however, we can see some short-term overbought conditions:
Expectations before the opening of today’s trading session are positive, with index futures currently up 1.1-1.5%, as investors react to the Bank Of Japan stimulus program announcement. The European stock market indexes have gained 1.1-1.9% so far. Investors will now wait for some economic data announcements: Personal Income, Personal Spending, PCE Prices Core number at 8:30 a.m., Chicago PMI at 9:45 a.m., Michigan Sentiment at 9:55 a.m. The S&P 500 futures contract (CFD) is in an intraday uptrend, as it breaks above the level of 2,000. The nearest important resistance level is at around 2,015-2,020, marked by all-time high. On the other hand, the level of support is at 1,990-2,000, as we can see on the 15-minute chart:
The technology Nasdaq 100 future contract (CFD) follows a similar path, as it trades at new all-time high. The nearest important level of support is at 4,100-4,120, among others, as the 15-minute chart shows:
Concluding, the broad stock market extended its uptrend, following some better-than-expected economic data releases. There have been no confirmed negative signals so far. However, we can see some short-term overbought conditions which may lead to a downward correction. 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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