Mixed Expectations As Indexes Fluctuate Along Record Levels

September 4, 2014

Briefly: In our opinion, speculative short positions are favored (entry point at 2,000.5 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 were mixed between -0.6% and +0.1% on Wednesday, extending their short-term consolidation, as investors took some profits off the table following recent rally. However, the S&P 500 index has managed to reach yet another new record high at 2,009.28. The resistance level remains at around 2,000-2,010, marked by recent highs. On the other hand, the nearest important level of support is at 1,990-1,995, and the next support level is at 1,980-1,985, among others. There have been no confirmed negative signals so far, however, we can see negative technical divergences accompanied by some overbought conditions:

Expectations before the opening of today’s session are virtually flat. The main European stock market indexes have been mixed between -0.8% and +0.1% so far. Investors will now wait for series of economic data announcements: Challenger Job Cuts report at 7:30 a.m., ADP Employment Change at 8:15 a.m., Initial Claims, Trade Balance, Productivity at 8:30 a.m., ISM Services at 10:00 a.m. The ADP (Automatic Data Processing) National Employment Report is a measure of employment derived from an anonymous subset of roughly half a million U.S. business clients. It is considered as a timely and accurate resource for estimates in labor market movements. The S&P 500 futures contract (CFD) continues to trade along the level of 2,000. The resistance level is at around 2,005-2,010, marked by recent local highs. On the other hand, the level of support is at 1,990-1,995, marked by local lows, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract (CFD) is in an intraday consolidation, as it fluctuates above the level of support at 4,060. The nearest important resistance level is at around 4,080-4,100. For now, it looks like a downward correction within short-term uptrend, as the 15-minute chart shows:

Concluding, the broad stock market remains relatively close to all-time high as the S&P 500 index continues to fluctuate along the level of 2,000. There have been no confirmed negative signals. However, we remain bearish, expecting a downward correction or uptrend reversal. We continue to maintain our 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).

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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