Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,140, and profit target at 1,980, S&P 500 index)
Our intraday outlook is 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): neutral
Long-term outlook (next year): bullish
The U.S. stock market indexes gained 0.1-0.2% on Thursday, as investors hesitated following recent advance. The S&P 500 index is relatively close to its May 20 all-time high of 2,134.72. The nearest important level of resistance is at around 2,120, and the next resistance level is at 2,130-2,135. On the other hand, level of support remains at 2,100. There have been no confirmed negative signals so far, however, we can see 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: Producer Price Index at 8:30 a.m., Michigan Sentiment at 10:00 a.m. The S&P 500 futures contract (CFD) trades within an intraday consolidation, as it fluctuates along the level of 2,100. The nearest important level of resistance is at 2,110-2,115, marked by local highs, as the 15-minute chart shows:
The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it trades along the level of 4,480. The nearest important level of resistance is at 4,500, and support level is at 4,470, marked by local low, as we can see on the 15-minute chart:
Concluding, the broad stock market got closer to its late May all-time high, extending its medium-term consolidation, as investors reacted to news concerning Greece debt deal. We continue to maintain our speculative short position (2,098.27, S&P 500 index), as we expect a downward correction or an uptrend reversal. Stop-loss is at 2,140, and potential profit target is at 1,980. 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
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