Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,060 and profit target at 1,940, S&P 500 index)

Our intraday outlook is now 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): bearish
Long-term outlook (next year): bullish

The U.S. stock market indexes gained between 0.1% and 0.5% on Monday, as investors reacted to quarterly corporate earnings releases, among others. The S&P 500 index continues to fluctuate above the level of 2,000. The nearest important level of resistance is at around 2,050, marked by the February - August consolidation. On the other hand, support level remains at 1,970-2,000. There have been no confirmed positive medium-term signals. It still looks like an upward correction following late August sell-off:

Expectations before the opening of today's trading session are negative, with index futures currently down 0.3-0.4%. The main European stock market indexes have lost 0.5-1.1% so far. Investors will now wait for some economic data announcements: Building Permits, Housing Starts at 8:30 a.m. The S&P 500 futures contract (CFD) trades within a short-term consolidation. The nearest important level of resistance is at around 2,030, and support level is at 2,000-2,010, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract (CFD) continues to fluctuate along its local highs, as it trades slightly below the level of 4,450. The nearest important level of resistance is at 4,450-4,460, and support level is at 4,400-4,420, among others, as we can see on the 15-minute chart:

Concluding, the broad stock market extended its short-term fluctuations on Monday, as investors awaited further quarterly corporate earnings releases. There have been no confirmed medium-term positive signals so far. It looks like a consolidation or a flat correction following late August sell-off. We continue to maintain our speculative short position (2,024.37, S&P 500 index), as we expect a downward correction or short-term uptrend reversal. Stop-loss is at 2,060 and potential profit target is at 1,940. 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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