Briefly: In our opinion, no speculative positions are justified.

Our intraday outlook is now 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 lost 2.3-3.1% on Thursday, extending their recent sell-off, as investors reacted to further global stock markets' rout. The S&P 500 index accelerated its recent move down, as it got away from 2,000 mark. The nearest important level of resistance is at 1,980-2,000, marked by previous local lows. On the other hand, support level is at around 1,900, marked by last year's August - September lows. There have been no confirmed positive signals so far. However, we can see some short-term oversold conditions, which may lead to a bounce at some point:

Expectations before the opening of today's trading session are positive, with index futures currently up 0.5-0.7%. The main European stock market indexes have been mixed so far. Investors will now wait for the economic data announcements: Nonfarm Payrolls, Unemployment Rate at 8:30 a.m., Wholesale Inventories number at 10:00 a.m. The S&P 500 futures contract trades within a short-term consolidation, following recent decline. The nearest important level of support remains at around 1,930, marked by local lows. On the other hand, resistance level is at around 1,950-1,970, among others. For now, it looks like a flat correction within a short-term downtrend. However, it may also be considered as a potential bottoming pattern before an upward correction. There have been no confirmed positive signals so far:

The technology Nasdaq 100 futures contract trades within a similar short-term consolidation following recent sell-off. It currently trades along the level of 4,330. The nearest important level of resistance is at 4,350-4,400, and support level is at 4,280-4,300. Will it break below recent local lows and continue its short-term downtrend? That may be the most likely scenario right now. However, we can see some oversold conditions:

Concluding, the broad stock market accelerated its short-term downtrend yesterday. Will it continue towards last year's August - September lows? There have been no confirmed positive signals so far. However, we can see some short-term technical oversold conditions, which may lead to an upward correction at some point. Therefore, we decided to close our profitable speculative short position (2,077.34, S&P 500 index) yesterday. It has been closed at the opening of yesterday's cash market trading session (S&P 500 index at around 1,965, following temporary opening price of 1,985.32, S&P 500 futures contract 1,947.90 at 9:30 a.m.). Overall, we gained around 112 index points on that trade. 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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