Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,060 and profit target at 1,940, S&P 500 index)

Our intraday outlook is now 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): bearish
Long-term outlook (next year): bullish

The U.S. stock market indexes lost between 0.1% and 0.5% on Tuesday, as investors reacted to quarterly corporate earnings releases, among others. However, the S&P 500 index has managed to reach yet another new short-term uptrend high. The nearest important resistance level is at around 2,050, marked by February - August consolidation. On the other hand, support level remains at 1,970-2,000. There have been no confirmed medium-term positive signals so far. It still looks like a correction following late August sell-off:

Expectations before the opening of today's trading session are positive, with index futures currently up 0.4-0.5%. The main European stock market indexes have gained 0.5-0.9% so far. Investors will now wait for some further quarterly earnings releases, and the Crude Inventories number at 10:30 a.m. The S&P 500 futures contract (CFD) trades within an intraday uptrend, as it retraces its short-term move down. The nearest important support level is at around 2,000-2,010, and resistance level is at 2,030, among others, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract (CFD) extends its short term consolidation. The nearest important level of resistance is at 4,450-4,470, and support level is at 4,400-4,420, as we can see on the 15-minute chart:

Concluding, the broad stock market remained within a short-term consolidation on Tuesday, as investors reacted to further quarterly corporate earnings releases. There have been no confirmed medium-term positive signals so far. It looks like a consolidation or a flat correction following late August sell-off. We continue to maintain our speculative short position (2,024.37, S&P 500 index), as we expect a downward correction or short-term uptrend reversal. Stop-loss is at 2,060 and potential profit target is at 1,940. You can trade S&P 500 index using futures contracts (S&P 500 futures contract - SP, E-mini S&P 500 futures contract - ES) or an ETF like the SPDR S&P 500 ETF - SPY. 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
Stock Trading Alerts