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 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 virtually flat on Monday, following last week's move up, as investors took some short-term profits off the table. The S&P 500 index remains close to its Friday's all-time high of 2,110.61. The nearest important resistance level is at around 2,110. On the other hand, level of support is at 2,090-2,100, among others. 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 some economic data announcements: Case-Shiller 20-city Index at 9:00 a.m., Consumer Confidence number at 10:00 a.m. The S&P 500 futures contract (CFD) extends its short-term fluctuations following recent advance. The nearest important level of support is at around 2,100, as we can see on the 15-minute chart:
The technology Nasdaq 100 futures contract (CFD) trades close to long-term high, as it moves along the level of 4,450. The nearest important support level is at around 4,430, marked by yesterday's local lows, as the 15-minute chart shows:
Concluding, the broad stock market traded along its record level on Monday. There have been no confirmed negative signals. However, we continue to maintain our speculative short position (S&P 500 index), as we expect a downward correction or an uptrend reversal. Stop-loss is at 2,150, and potential profit target is at 1,980. It is always important to set some exit price level in case some events cause the price to move in the unlikely direction. Having safety measures in place helps limit potential losses while letting the gains grow.
Thank you.
Paul Rejczak
Stock Trading Strategist
Stock Trading Alerts
