Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,085 and profit target at 1,950, S&P 500 index).
Our intraday outlook is bearish, and our short-term outlook is bearish:
Intraday
(next 24 hours) outlook: bearish
Short-term (next 1-2 weeks) outlook: bearish
Medium-term (next 1-3 months) outlook: neutral
Long-term outlook (next year): bullish
The main U.S. stock market indexes gained 0.4-0.5% on Thursday, following a volatile trading session, as investors reacted to some further global economic concerns. The S&P 500 index bounced off the resistance level at around 2,050-2,060, which is negative. The nearest important level of support is at 2,020-2,025, marked by Wednesday’s daily low, among others. There have been no positive short-term signals so far, as we can see on the daily chart:
Expectations before the opening of today’s trading session are negative, with index futures currently down 0.6-0.7%. The European stock market indexes have lost 1.2-1.5% so far. Investors will now wait for some economic data announcements: Producer Price Index at 8:30 a.m., Michigan Sentiment number at 9:55 a.m. The S&P 500 futures contract (CFD) extended its downtrend, as it fell below recent lows. The nearest important support level is at around 2,015, and the nearest level of resistance remains at 2,030, as the 15-minute chart shows:
The technology Nasdaq 100 futures contract (CFD) followed a similar path, as it broke below the level of 4,200. The nearest important support level is at 4,190-4,200, and the level of resistance remains at 4,230, among others:
Concluding, the broad stock market extended its short-term consolidation yesterday, as the S&P 500 index continued to fluctuate within Wednesday’s trading range. We continue to maintain our already profitable speculative short position. Stop-loss is at 2,085 and potential profit target is at 1,950 (S&P 500 index). 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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