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 gained 0.9-2.7% on Friday, extending their recent rally, as investors reacted to quarterly corporate earnings releases. The S&P 500 index continues to trade above the level of 2,000, as it gets closer to long-term highs. The nearest important level of resistance is at 2,100-2,130, and support level is at 2,020-2,050, marked by previous resistance level:
Expectations before the opening of today's trading session are virtually flat, with index futures currently down 0.1%. The main European stock market indexes have been mixed so far. Investors will now wait for the New Home Sales number release at 10:00 a.m. The S&P 500 futures contract (CFD) trades within an intraday consolidation, following last week's rally. The nearest important level of resistance is at around 2,070, and support level is at 2,030-2,050, among others, as the 15-minute chart shows:
The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it currently trades along the level of 4,600. The nearest important level of resistance is at 4,630-4,640, and support level is at 4,570, as we can see on the 15-minute chart:
Concluding, the broad stock market continued its rally on Friday, as investors reacted to quarterly corporate earnings releases. Our speculative short position (2,024.37, S&P 500 index) has been closed at the stop-loss level of 2,060 (S&P 500 index) on Thursday, as the futures contract extended its gains after-hours. It followed our recent gain of 131.83 index points. We prefer to be out of the market at this moment, avoiding low risk/reward ratio trades. We will let you know when we think it is safe to get back in the market.
Here is the summary of our S&P 500 index trades this year so far:
02-18-2015 open short 2,099.16
03-18-2015 close short (stop-loss profit taking) 2,090 +9.16
04-22-2015 open short 2,098.27
08-21-2015 close short (profit taking) 1,980 +118.27
09-29-2015 open long 1,881.90
10-09-2015 close long (profit taking) 2,013.73 +131.83
10-16-2015 open short 2,024.37
10-22-2015 close short (stop-loss) 2,060 -35.63
Thank you.
Paul Rejczak
Stock Trading Strategist
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