The major U.S. stock market indexes lost 0.3-0.7% yesterday, extending their recent downtrend, as investors feared that the Fed will finally begin tapering its bond purchases program. The S&P 500 index is at the crucial support level of 1,770-1,775. On the other hand, the resistance remains at 1,800, and the next resistance is at 1,810-1,815, marked by the November 29 all-time high of 1,813.55. So far, it looks like a medium-term topping consolidation, as we can see some sort of a head and shoulders pattern on the daily chart:

Expectations before the opening of today’s session are positive, with index futures currently up between 0.2% and 0.3%. The European stock market indexes have been mixed. Investors will now wait for the Producer Price Index for the month of November announcement at 8:30 a.m. The S&P 500 futures contract (CFD) trades below its recent consolidation, which is a negative signal. The nearest resistance is at around 1,780-1,785, marked by yesterday’s local highs, as the 15-minute chart shows:

Our intraday outlook remains 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

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Thank you,
Paul Rejczak