Briefly: In our opinion, no speculative positions are justified
Our intraday outlook is 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 lost between 0.1% and 0.9% on Wednesday, as investors reacted to economic data, quarterly corporate earnings releases. The S&P 500 index broke below the level of 2,000, extending its short-term correction following recent move up. The nearest important level of resistance is at around 2,000-2,020, and support level is at 1,970, marked by some previous local lows. There have been no confirmed medium-term positive signals so far. It still looks like an upward correction following late August sell-off:
Expectations before the opening of today's trading session are positive, with index futures currently up 0.6-0.7%. The main European stock market indexes have ganed 1.0-1.5% so far. Investors will now wait for some economic data announcements: Initial Claims, Consumer Price Index, Empire Manufacturing number at 8:30 a.m., Philadelphia Fed at 10:00 a.m. Crude Inventories release at 10:30 a.m. The S&P 500 futures contract (CFD) trades within an intraday uptrend, as it retraces yesterday's decline. The nearest important level of support is at 1,980-1,990, and resistance level is at 2,000-2,010, as the 15-minute chart shows:
The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it trades along yesterday's highs. The nearest important level of resistance is at 4,380-4,400, and support level is at 4,320-4,330, among others, as we can see on the 15-minute chart:
Concluding, the broad stock market continued its short-term downtrend on Wednesday, as investors reacted to economic data, quarterly corporate earnings releases. There have been no confirmed medium-term positive signals so far. It continues to look like a consolidation or a flat correction following late August sell-off. Our late September long position (1,881.9 S&P 500) has been closed at the level of 2,013.73 on Friday. Overall, we gained around 131.83 index points on that trade. We prefer to be out of the market, avoiding low risk/reward ratio trades. We will let you know when we think it is safe to get back in the market.
Thank you.
Paul Rejczak
Stock Trading Strategist
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