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 U.S. stock market indexes gained between 0.2% and 0.7% on Tuesday, extending their long-term uptrend, as investors reacted to some better-than-expected economic data releases. The S&P 500 index has reached yet another new all-time high at the level of 2,056.08. The nearest important support level is at around 2,040-2,045, marked by previous level of resistance, and the next support level is at 2,020-2,025, among others. There have been no confirmed negative signals so far, however, we still can see overbought conditions accompanied by negative technical divergences:
Expectations before the opening of today’s trading session are virtually flat. The main European stock market indexes have been mixed so far. Investors will now wait for some economic data announcements: Housing Starts, Building Permits at 8:30 a.m., FOMC Minutes at 2:00 p.m. The S&P 500 futures contract (CFD) trades close to its new all-time high. The nearest important resistance level is at around 2,050-2,055. On the other hand, support level is at 2,035-2,040, marked by previous level of resistance, among others, as we can see on the 15-minute chart:
The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it fluctuates slightly below yesterday’s high. The level of resistance is at around 4,250, and the nearest important support level remains at 4,220, marked by previous resistance levels, as the 15-minute chart shows:
Concluding, the broad stock market extended its long-term uptrend, as it reached new all-time high yesterday. We expect a downward correction or an uptrend reversal. Therefore, we continue to maintain our 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
Stock Trading Alerts
