Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,150 and profit target at 1,980, S&P 500 index)
Our intraday outlook is bearish, and our short-term outlook is bearish:
Intraday outlook (next 24 hours): bearish
Short-term outlook (next 1-2 weeks): bearish
Medium-term outlook (next 1-3 months): neutral
Long-term outlook (next year): bullish
The main U.S. stock market indexes were mixed between -0.3% and +0.5% on Thursday, as investors continued to hesitate following last week's rally. The S&P 500 index has managed to reach yet another new all-time high at the level of 2,102.13, before closing slightly lower. The nearest important resistance level is at around 2,100. On the other hand, support level remains at 2,070-2,080, among others. There have been no confirmed negative signals so far. However, we can see negative divergences accompanied by overbought conditions:
Expectations before the opening of today's trading session are virtually flat, with index futures currently up 0.1%. The European stock market indexes have been mixed so far. The S&P 500 futures contract (CFD) extends its short-term consolidation, as it trades along the level of 2,090. The nearest important level of resistance is at 2,100, as we can see on the 15-minute chart:
The technology Nasdaq 100 futures contract (CFD) is relatively stronger than the broad stock market gauge, as it reaches new long-term high. The nearest important level of support is at 4,380-4,400, marked by previous resistance level, among others, as the 15-minute chart shows:
Concluding, the broad stock market extended its short-term fluctuations on Thursday, following last week's move up. There have been no confirmed negative signals. However, we continue to maintain our speculative short position (2,099.16, S&P 500 index), as we expect a downward correction or an uptrend reversal. Stop-loss is at 2,150, and potential profit target is at 1,980. It is always important to set some exit price level in case some events cause the price to move in the unlikely direction. Having safety measures in place helps limit potential losses while letting the gains grow.
Thank you.
Paul Rejczak
Stock Trading Strategist
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