Indexes Fluctuate Along Record Levels – Will Uptrend Continue?

November 17, 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 main U.S. stock market indexes were virtually flat on Friday, as investors continued to hesitate following October-November rally. The S&P 500 index remains close to its Thursday’s all-time high of 2,046.18. The nearest important level of resistance is at around 2,040-2,050, and the support level remains at 2,020-2,025, marked by previous local extreme levels. There have been no confirmed negative signals so far, however, we still can see some overbought conditions:

U.S. stock market indexes

Expectations before the opening of today’s trading session are slightly negative, with index futures currently down 0.2-0.3%. The European stock market indexes have lost 0.2-0.4% so far. Investors will now wait for some economic data announcements: Empire Manufacturing at 8:30 a.m., Industrial Production, Capacity Utilization at 9:15 a.m. The S&P 500 futures contract (CFD) extends its short-term consolidation, as it moves along the level of 2,030. The resistance level remains at around 2,040, and the nearest important level of support is at 2,025, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it fluctuates along the level of 4,200. The nearest important resistance level is at around 4,220-4,230, marked by recent highs. On the other hand, support level remains at around 4,190-4,200, as the 15-minute chart shows:

technology nasdaq futures

Concluding, the broad stock market remains close to all-time highs, as it extends recent fluctuations. We expect a downward correction or an uptrend reversal. Therefore, we continue to maintain our speculative short position. 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.

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