Briefly: In our opinion speculative long positions are still favored (with stop-loss at 1,910, S&P 500 index).

Our intraday outlook is neutral, and our short-term outlook is bullish, following a breakout above consolidation:

Intraday (next 24 hours) outlook: neutral
Short-term (next 1-2 weeks) outlook: bullish
Medium-term (next 1-3 months) outlook: neutral
Long-term outlook (next year): bullish

The main U.S. stock market indexes gained between 0.6% and 0.9% on Thursday, as investors reacted positively to the European Central Bank’s rate decision announcement. The S&P 500 index has made new all-time high at 1,941.74, accelerating its recent uptrend, following few day long consolidation. The nearest important support level is at 1,925, marked by previous resistance, and the next support is at around 1,915. On the other hand, a possible resistance level is at 1,950. There have been no confirmed negative signals so far, however we can see some overbought, as the daily chart shows:

Expectations before the opening of today’s session are virtually flat, with index futures currently up 0.1%. The European stock market indexes have gained 0.1-0.3% so far. Investors will now wait for some important economic data releases: Nonfarm Payrolls and the Unemployment Rate for the month of May at 8:30 a.m. The S&P 500 futures contract (CFD) is in a relatively narrow intraday trading range, following yesterday’s rally. The nearest important support level is at around 1,920-1,925, and a potential resistance is at 1,940-1,950. For now, it looks like another flat correction within an uptrend, however some sort of a retracement scenario cannot be excluded here:

The technology Nasdaq 100 futures contract (CFD) followed a similar path, extending its long-term uptrend, as it reached new multi-year highs. The support level is at around 3,740-3,750, marked by previous resistance, and a potential level of resistance is at the psychological 3,800. There have been no confirmed uptrend reversal signals so far, as the 15-minute chart shows:

Concluding, the broad stock market accelerates its long-term uptrend, as it reaches new all-time highs. We remain cautiously optimistic, expecting some further advance. However, one cannot exclude a correction here, because investors’ sentiment seems almost euphoric, and the overall technical situation looks somewhat overbought at the moment. We continue to maintain our already profitable speculative long position, moving the stop-loss up a bit, just to protect our profits - to the level of 1,910, slightly below the above-mentioned support level of 1,915 (S&P 500 index).

Thank you.

Paul Rejczak
Stock Trading Strategist
Stock Trading Alerts