Briefly: In our opinion, no speculative positions are justified
Our intraday outlook is now neutral, and our short-term outlook is neutral:
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): bullish
The U.S. stock market indexes were mixed between -0.1% and +0.1% on Monday, as investors took some short-term profits following last week's rally. Our yesterday's neutral intraday outlook has proved accurate. The S&P 500 index continues to trade within its February - August consolidation. The nearest important level of resistance is at 2,100-2,130, and support level is at 2,020-2,050, marked by previous resistance level, among others:
Expectations before the opening of today's trading session are virtually flat. The main European stock market indexes have lost 0.2-0.3% so far. Investors will now wait for the economic data announcements: Durable Orders at 8:30 a.m., Case-Shiller 20-city Index at 9:00 a.m., Consumer Confidence number at 10:00 a.m., along with some further quarterly corporate earnings releases. The S&P 500 futures contract (CFD) trades within an intraday consolidation, as it fluctuates along the level of 2,060. The nearest important level of support is at around 2,050, and resistance level is at 2,070, as the 15-minute chart shows:
The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it continues to trade along the level of 4,600. The nearest important level of resistance is at 4,630-4,640, and support level remains at 4,590-4,600, as we can see on the 15-minute chart:
Concluding, the broad stock market remained virtually flat on Monday, as investors took some short-term profits off the table. Our speculative short position (2,024.37, S&P 500 index) has been closed at the stop-loss level of 2,060 (S&P 500 index) on Thursday, as the futures contract extended its gains after-hours. It followed our recent gain of 131.83 index points. We prefer to be out of the market at this moment, avoiding low risk/reward ratio trades. We will let you know when we think it is safe to get back in the market.
Here is the summary of our S&P 500 index trades this year so far:
02-18-2015 open short 2,099.16
03-18-2015 close short (stop-loss profit taking) 2,090 +9.16
04-22-2015 open short 2,098.27
08-21-2015 close short (profit taking) 1,980 +118.27
09-29-2015 open long 1,881.90
10-09-2015 close long (profit taking) 2,013.73 +131.83
10-16-2015 open short 2,024.37
10-22-2015 close short (stop-loss) 2,060 -35.63
Thank you.
Paul Rejczak
Stock Trading Strategist
Stock Trading Alerts
