Indexes Expected To Open Lower Following Yesterday’s FOMC Decision – Negative Trend Or Just A Temporary Pull-Back?
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 main U.S. stock market indexes were mixed between -0.2% and +0.4% on Wednesday, extending their short-term consolidation, as investors reacted to some important economic data announcements, quarterly earnings releases, FOMC Rate Decision release. Our yesterday’s neutral intraday outlook has proved accurate. The S&P 500 index remains in a month-long consolidation, below its upward trend line, which is negative. However, there have been no confirmed negative signals so far. The level of resistance is at around 1,990-2,000, marked by July 24 all-time high of 1,991.39. On the other hand, the support level is at 1,950-1,970, marked by previous local lows, as we can see on the daily chart:
Expectations before the opening of today’s session are negative, with index futures currently down 0.5-0.6%. The European stock market indexes have lost 0.2-0.8% so far. Investors will now wait for some economic data announcements: Challenger Job Cuts report at 7:30 a.m., Initial Claims, Employment Cost Index at 8:30 a.m., Chicago PMI at 9:45 a.m. The Chicago PMI report release for the month of July is supposed to be the most important of today’s announcements, as it measures manufacturing and corresponding businesses’ performance for a given month. The S&P 500 futures contract (CFD) is in an intraday downtrend, as it trades below the level of support at around 1,960. The nearest important support level is at 1,945-1,950, as the 15-minute chart shows:
The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it trades below its recent consolidation. The nearest important support level is at around 3,930-3,940, marked by Monday’s local lows. On the other hand, the level of resistance is at 3,950-3,960, among others:
Concluding, the broad stock market extends its short-term consolidation, as the S&P 500 index trades along the level of 1,960-1,980. There have been no confirmed negative signals so far. However, a downward correction cannot be excluded here. We think that it is better to stay out of the market at this time, avoiding low risk/reward ratio trades. We will let you know when we think it is safe to get back in the market.
Stock Trading Strategist
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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.