Briefly: In our opinion, no speculative positions are justified.

Our intraday outlook is neutral, and our short-term outlook is neutral. Our medium-term outlook remains bearish, as the S&P 500 index extends its lower highs, lower lows sequence:

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): neutral

The main U.S. stock market indexes gained 1.3-1.4% on Tuesday, retracing their last week's decline, as investors' sentiment improved. The S&P 500 index extended its short-term rebound off support level at 2,030-2,040, marked by previous local lows. The nearest important level of support is at around 2,050, marked by recent consolidation. On the other hand, resistance level is at around 2,100-2,110, marked by late April local highs. The next important level of resistance is at 2,130-2,135, marked by last year's May all-time high of 2,134.72. Last year's highs along the level of 2,100 continue to act as medium-term resistance level. Will the market break above these highs and continue its seven-year long bull market?

Expectations before the opening of today's trading session are negative, with index futures currently down 0.2-0.3%. The European stock market indexes have lost 0.2-1.0% so far. Investors will now wait for the Crude Inventories number release at 10:30 a.m. The S&P 500 futures contract trades within an intraday consolidation, following yesterday's move up. For now, it looks like a flat correction within a short-term uptrend. The nearest important level of resistance is at around 2,080, marked by yesterday's high. On the other hand, support level is at 2,050-2,060, among others, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract follows a similar path, as it fluctuates along the level of 4,380, following a rebound off resistance level at 4,400. The nearest important level of support is at 4,350-4,360, marked by some previous consolidation, among others. The market remains within a short-term uptrend. There have been no confirmed negative signals so far:

Concluding, the broad stock market extended its Monday's move up yesterday, as the S&P 500 index retraced its last week's decline. The index remains relatively close to last year's medium-term highs along the level of 2,100 and continues to trade above its late March - early April local lows. It still looks like a correction within a medium-term uptrend, so we prefer to be out of the market, avoiding low risk/reward ratio trades. We will let you know when we think it is safe to get back in the market.

Thank you.

Paul Rejczak
Stock Trading Strategist
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