Indexes Continued Their Sell-Off Following Declining Oil Prices

December 15, 2014

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 lost between 1.1% and 1.8% on Friday, extending their short-term downtrend, as investors reacted to worsening global economic outlook following oil prices sell-off, among others. The S&P 500 index is the lowest since late October, as it trades close to the level of 2,000. The nearest important support level is at around 2,000, marked by the October 31st daily gap up of 1,999.4-2,001.2, among others. On the other hand, level of resistance remains at around 2,020-2,025, marked by recent local lows, as we can see on the daily chart:

Expectations before the opening of today’s trading session are positive, with index futures currently up 0.7-0.8%. The main European stock market indexes have gained 0.3-0.5% so far. Investors will now wait for some economic data announcements: Empire Manufacturing number at 8:30 a.m., Industrial Production, Capacity Utilization at 9:15 a.m., NAHB Housing Market Index at 10:00 a.m. The S&P 500 futures contract (CFD) is in an intraday uptrend, as it retraces some of its recent decline. The nearest important level of support is at around 1,990-2,000, and resistance level is at 2,020-2,030, among others, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract (CFD) follows a similar path as it trades above the level of 4,200. The nearest important level of support remains at 4,180-4,200, and resistance level is at 4,250, among others:

Concluding, the broad stock market extended its short-term downtrend, as the S&P 500 index got closer to the level of 2,000. We continue to maintain our already profitable short position with entry point at 2,038 (November 12th opening price of the S&P 500 index). 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.

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.

US silver mining began on a large scale with the discovery of the Comstock Lode in Nevada in 1858.