Stock Trading Alert: Stocks Extended Short-Term Fluctuations Along Record Levels – No Weakness Yet

Posted by Paul Rejczak - Sunshine Profits

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Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,150 and profit target at 1,980, 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): neutral
Long-term outlook (next year): bullish

The U.S. stock market indexes were virtually flat on Wednesday, as investors continued to hesitate following last week’s rally. The S&P 500 index remains relatively close to its Tuesday’s all-time high of 2,101.30. The nearest important resistance level is at around 2,100. On the other hand, level of support is at 2,070-2,080, marked by some previous local highs, among others. There have been no confirmed negative signals so far. However, we can see overbought conditions accompanied by negative technical divergences:

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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: Initial Claims at 8:30 a.m., Philadelphia Fed, Leading Indicators at 10:00 a.m. The S&P 500 futures contract (CFD) extends its short-term consolidation, following last week’s move up. The nearest important resistance level remains at around 2,100. On the other hand, level of support is at 2,080-2,090, among others, as we can see on the 15-minute chart:

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The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it extends its short-term consolidation along the level of 4,390. The nearest important resistance level is at 4,400 and support level is at 4,350-4,370, among others, as the 15-minute chart shows:

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Concluding, the broad stock market extended its short-term fluctuations on Wednesday, following last week’s rally. There have been no confirmed negative signals. However, we continue to maintain our speculative short position (2,099.16, S&P 500 index), as we expect a downward correction or an uptrend reversal. Stop-loss is at 2,150, and potential profit target is at 1,980. 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.