Briefly: In our opinion speculative long positions are still favored (with stop-loss at 1,850, S&P 500 index).
Our intraday outlook is bullish, and our short-term outlook remains neutral:
Intraday
(next 24 hours) outlook: bullish
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 lost between 0.8% and 1.4% on Tuesday, retracing last week’s move up, as investors took profits, fearing there is not enough buying power to overcome resistance levels. Once again, the S&P 500 index bounced off the crucial resistance at 1,880-1,900, moving away from its early April all-time high of 1,897.28. On the other hand, the nearest important level of support remains at around 1,850. For now, it looks like some further medium-term consolidation, below the level of 1,900:
Expectations before the opening of today’s session are virtually flat, with index futures currently mixed between 0.0% and +0.1%. The European stock market indexes have lost 0.1-0.2% so far. Investors will now wait for the Productivity data release at 8:30 a.m. and the Janet Yellen’s Testimony before U.S. Congress at 10:00 a.m. The S&P 500 futures contract (CFD) continues to fluctuate within its over two week-long consolidation, as it trades below the resistance of 1,880-1,885. The support level is at around 1,850-1,860. There have been no confirmed negative signals so far. Actually, the broad stock market remains trendless for some time, as we can see on the 15-minute chart:
The technology Nasdaq 100 futures contract (CFD) bounced off the resistance level at around 3,600 once again. The nearest important support is at 3,540-3,550, and the next support is at 3,480-3,500. Analogously, there is no clear short-term direction, as the 15-minute chart shows:
Concluding, the broad stock market seems stalling at 1,900 resistance, and our speculative long position is getting somewhat risky. However, in our opinion it is not the time to be out of the long position just yet, because there have been no confirmed sell signals. Our stop-loss remains at 1,850 (S&P 500 index), and we will let the market decide.
Thank you.
Paul Rejczak
Stock Trading Strategist
Stock Trading Alerts
