Briefly: In our opinion, no speculative positions are justified
Our intraday outlook is neutral, and our short-term outlook is neutral:
Intraday outlook (next 24 hours): neutral
Short-term outlook (next 1-2 weeks): neutral
Medium-term outlook (next 1-3 months): bearish
Long-term outlook (next year): bullish
The U.S. stock market indexes gained 0.1-0.5% on Friday, slightly extending their recent move up, as investors reacted to economic data, quarterly corporate earnings releases. Our Friday's neutral intraday outlook has proved accurate. The S&P 500 index remains above the level of 2,000, as it trades along its mid-September's local high. The nearest important resistance level is at around 2,020-2,050. On the other hand, support level is at 1,970-2,000. It still looks like a medium-term consolidation following late August sell-off:
Expectations before the opening of today's trading session are virtually flat. The bond market is closed due to a holiday today, so stocks may be less volatile. The main European stock market indexes have been mixed so far. The S&P 500 futures contract (CFD) trades within an intraday consolidation, as it extends its Friday's fluctuations. The nearest important level of resistance is at around 2,010-2,015, and support level is at 1,995-2,000, as the 15-minute chart shows:
The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it trades along the level of 4,350. The nearest important level of resistance is at 4,370, and support level remains at 4,320, among others, as we can see on the 15-minute chart:
Concluding, the broad stock market slightly extended its short-term uptrend, as the S&P 500 index remained above the level of 2,000 on Friday. However, there have been no confirmed medium-term positive signals so far. It continues to look like a consolidation or a flat correction following late August sell-off. Our late September long position (1,881.9 S&P 500) has been closed at the level of 2,013.73 on Friday. Overall, we gained around 131.83 index points on that trade. As of this morning, 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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