Investors Remain Uncertain As Stock Fluctuate Near Long-Term Highs – Will The Uptrend Extend?
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 lost between 0.5% and 0.7% on Friday, retracing their recent rally, as investors reacted to some geopolitical news concerning Russia-Ukraine and Middle East conflicts. The S&P 500 index extended its short-term consolidation, as it bounced off Thursday’s new all-time high of 1,991.39. The resistance level is at 1,990-2,000, and the nearest important level of support is at around 1,950-1,960, marked by some of the recent local lows. The index remains slightly above upward trend line, which is positive. Last weeks’ trading action looks like some sort of a medium-term topping pattern, however, there have been no confirmed negative signals so far:
Expectations before the opening of today’s trading session are virtually flat, with index futures currently down 0.1%. The main European stock market indexes have been mixed so far. Investors will now wait for the Pending Home Sales data announcement at 10:00 a.m. The Pending Home sales index measures housing contract activity. It is based on signed real estate contracts. The S&P 500 futures contract (CFD) retraced some of its recent move up, as it bounced off the resistance level of 1,980-1,985. On the other hand, the support remains at around 1,960, marked by previous local low. There have been no confirmed negative signals so far, as we can see on the 15-minute chart:
The technology Nasdaq 100 futures contract (CFD) followed a similar path, as it bounced off new long-term highs recently. The level of resistance is at around 3,990-4,000. On the other hand, the support level is at 3,930-3,940, among others, as the 15-minute chart shows:
Concluding, the broad stock market remains close to all-time highs, as the S&P 500 index trades slightly below the psychological resistance level of 2,000. Investors continue to hesitate ahead of key economic data announcements, including Wednesday’s U.S. GDP number and Friday’s Jobs report release. Will the uptrend continue? There have been no confirmed negative signals so far. However, the risk/reward ratio for the long positions seems unfavorable. Therefore, we think that it is better to stay out of the market at this moment. From my personal experience, it is better to get in the market too late, following a confirmation of a new short-term trend, than just bet on the direction of a potential breakout, getting in the market too early. 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.