Indexes Extend Their Recent Fluctuations – No Clear Direction Yet

September 11, 2014

Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,030 and a profit target at 1,900, 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 0.3-0.8% on Wednesday, extending their recent fluctuations, as investors continued to hesitate following last week’s economic data announcements, among others. The S&P 500 index remains relatively close to its all-time high of 2,011.17. The nearest important level of resistance is at around 2,000-2,010, and the support level is at 1,980-1,985, marked by recent local lows. There have been no confirmed negative signals so far. However, we still can see negative technical divergences, accompanied by overbought conditions:

market indexes

Expectations before the opening of today’s session are negative, with index futures currently down 0.2-0.3%. The main European stock market indexes have lost 0.2-0.4% so far. Investors will now wait for the Initial Claims data release at 8:30 a.m. The S&P 500 futures contract (CFD) continues to fluctuate along the level of 2,000. The resistance level is at around 2,000-2,010, and the nearest important level of support is at 1,980-1,985, marked by local lows, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract (CFD) remains in a short-term consolidation, as it moves along the level of 4,000. The nearest important level of resistance is at around 4,100-4,115, and the support level is at 4,050-4,060, marked by local lows, as the 15-minute chart shows:

Concluding, the broad stock market retraced some of its month-long advance as the S&P 500 index broke below the level of 2,000. We remain bearish, expecting a downward correction or uptrend reversal. Therefore, we continue to maintain our already profitable speculative short position with entry point at 2,000.5 (S&P 500 index). The stop-loss is at the level of 2,030 and potential profit target is at 1,900 (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.

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