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 main U.S. stock market indexes gained between 0.5% and 0.8% on Wednesday, retracing some of their recent decline, as investors reacted to FOMC Minutes data release, among others. The S&P 500 index continues to fluctuate below its July 3 all-time high of 1,985.59. The level of resistance is at around 1,980-1,985, and the next resistance is at the psychological level of 2,000. On the other hand, the nearest important support is at 1,950-1,960, marked by some of the recent local extremes. There have been no confirmed negative signals so far. The index remains above month-long upward trend line, as we can see on the daily chart:

Expectations before the opening of today’s session are decisively negative, with index futures currently down 0.8%. The European stock market indexes have lost 0.7-1.4% so far. Investors will now wait for some economic data announcements: Initial Claims at 8:30 a.m., Wholesale Inventories at 10:00 a.m. The S&P 500 futures contract (CFD) is in an intraday downtrend, as it breaks below Tuesday’s local low. The resistance level remains at around 1,965-1,970. On the other hand, a potential level of support is at 1,935-1,940, marked by late June consolidation, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract (CFD) sells off similarly this morning, however, it remains above Tuesday’s local low. The nearest level of support is at around 3,840, and the resistance level is at around 3,880-3,890:

Concluding, the broad stock market remains in a consolidation following month-long advance. There have been no confirmed negative signals so far. However, we can see some increased volatility, which may lead to a change of trend. Therefore, we think that it is better to stay out of the market at this moment. In other words, we will wait for some better risk/reward opportunity. In such a choppy market environment, the only winners are brokers with their commissions, and we care much more about your profits than we care about brokers’ commissions.

Thank you.

Paul Rejczak
Stock Trading Strategist
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