Briefly: In our opinion short positions are still favored (stop-loss at 1,850, short-term profit target at around 1,800, S&P 500 index).
Our intraday outlook remains neutral, as the market may continue to consolidate after selling off recently, and our short-term outlook remains bearish, following breakdown below March-April consolidation:
Intraday
(next 24 hours) outlook: neutral
Short-term (next 1-2 weeks) outlook: bearish
Medium-term (next 1-3 months) outlook: neutral
Long-term outlook (next year): bullish
The U.S. stock market indexes gained between 0.4% and 0.7% on Tuesday, following volatile trading session, as investors reacted to some better-than-expected corporate earnings releases, neglecting negative news concerning an ongoing Russia-Ukraine conflict. Our yesterday’s neutral intraday outlook has proved to be quite right. However, the S&P 500 index broke above its two-day long trading range, as it bounced off the level of support at 1,800-1,810. The resistance remains at 1,840-1,850. For now, it looks like a correction within downtrend, as we can see on the daily chart:
Expectations before the opening of today’s session are positive, with index futures currently up 0.5-0.6%. The main European stock market indexes have gained 0.4-1.0% so far. Investors will now wait for some economic data announcements: Housing Starts, Building Permits at 8:30 a.m., Industrial Production, Capacity Utilization at 9:15 a.m., Fed’s Beige Book release at 2:00 p.m. The S&P 500 futures contract (CFD) is in an intraday uptrend, following yesterday’s move up. The support level remains at 1,800-1,810, and the nearest important resistance is at 1,865-1,870, marked by last week’s local high, as the 15-minute chart shows:
The technology Nasdaq 100 futures contract (CFD) has extended its short-term downtrend yesterday, testing the psychological support level at 3,400. On the other hand, the resistance is at 3,540-3,550, among others. For now, it looks like a correction within downtrend, as there have been no confirmed downtrend reversal signals so far:
Concluding, the broad stock market extends its short-term consolidation, following recent declines. For now, it still looks like a flat correction within a downtrend.
Thank you.
Paul Rejczak
Stock Trading Strategist
Stock Trading Alerts
