Broad Stock Market At New Highs – Will Uptrend Continue?

December 29, 2014

Briefly: In our opinion, no speculative positions are justified.

Our intraday outlook remains neutral, and our short-term outlook is neutral:

Intraday (next 24 hours) outlook: neutral

Short-term (next 1-2 weeks) outlook: neutral

Medium-term (next 1-3 months) outlook: neutral

Long-term outlook (next year): bullish

The U.S. stock market indexes gained between 0.1% and 0.7% on Friday, during a shortened trading session as investors’ sentiment remained bullish. The S&P 500 index has reached yet another new all-time high at the level of 2,092.70. The nearest important level of resistance is at around 2,090-2,100. On the other hand, support level is at 2,080, marked by previous local high, among others. There have been no confirmed negative signals so far, however, we can see some overbought conditions accompanied by negative technical divergences:

Expectations before the opening of today’s trading session are slightly negative, with index futures currently down 0.1-0.2%. The main European stock market indexes have been mixed so far. The S&P 500 futures contract (CFD) retraces some of its recent move up, as it trades along the level of 2,080. The nearest important level of resistance is at around 2,085-2,090, marked by last week’s highs. On the other hand, support level remains at 2,060-2,070, among others, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract (CFD) followed a similar path, as it bounced off resistance level at around 4,320. The nearest important level of support is at 4,290-4,300, as the 15-minute chart shows:

Concluding, the broad stock market slightly extended its rally on Friday, as the S&P 500 index reached new all-time high. We can see some short-term overbought conditions, however, there have been no confirmed negative signals so far. Therefore, 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.

Paul Rejczak

Stock Trading Strategist

Stock Trading Alerts

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All essays, research and information found above represent analyses and opinions of Paul Rejczak and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Paul Rejczak and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Rejczak is not a Registered Securities Advisor. By reading Paul Rejczak’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Paul Rejczak is a stock market strategist, who has been known for quality of his technical and fundamental analysis since the late nineties. He is interested in forecasting market behavior based on both traditional and innovative methods of technical analysis. Paul has made his name by developing mechanical trading systems. Paul is the author of Sunshine Profits’ premium service for stock traders: Stock Trading Alerts.

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