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 0.2-0.4% on Wednesday, retracing their recent decline, as investors reacted to some economic data announcements. The S&P 500 index has managed to reach yet another new all-time high at the level of 2,076.28, slightly exceeding last week’s top. The nearest important level of resistance is at around 2,085-2,100. On the other hand, support level is at around 2,060-2,065, and the next level of support is at 2,050, marked by recent local low, among others. There have been no confirmed negative signals so far, however, we can see overbought conditions accompanied by negative technical divergences:
Expectations before the opening of today’s trading session are virtually flat, with index futures currently up 0.1%. The main European stock market indexes have been mixed so far. Investors will now wait for some economic data announcements: Challenger Job Cuts report at 7:30 a.m., Initial Claims at 8:30 a.m. The S&P 500 futures contract (CFD) trades close to its record high, as it fluctuates along the level of 2,070. The nearest important level of support remains at around 2,060-2,065, as we can see on the 15-minute chart:
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The technology Nasdaq 100 futures contract (CFD) is relatively weaker, as it trades below last week’s high. The nearest important level of resistance is at around 4,330-4,350. On the other hand, support level is at 4,280-4,300, as the 15-minute chart shows:
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Concluding, the broad stock market slightly extended its long-term uptrend, as it made new record high yesterday. There have been no confirmed negative signals so far. However, we still 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.
