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

Our intraday outlook remains 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 U.S. stock market indexes lost 0.9-1.2% on Wednesday, as they accelerated its recent move down. The S&P 500 index broke below the nearest important support level of 2,080, which is a negative short-term signal. The next support level is at around 2,050. For now, it looks like a downward correction within an uptrend, however, a negative uptrend reversal scenario cannot be excluded here:

Expectations before the opening of today’s session are positive, with index futures currently up 0.4%. The main European stock market indexes have lost between 0.1% and 0.7% so far. Investors will now wait for some economic data announcements: ISM Index, Construction Spending at 10:00 a.m. The S&P 500 futures contract (CFD) fluctuates following Wednesday’s sell-off. The nearest important support level is at around 2,050-2,055. On the other hand, resistance level is at 2,065-2,070, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it fluctuates following recent move down. The nearest important level of support remains at 4,240-4,250, among others, as the 15-minute chart shows:

Concluding, the broad stock market retraced some more of its December move up, as the S&P 500 index broke below support level of 2,080. For now, it looks like a correction within an uptrend. Therefore, 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
Stock Trading Alerts