Negative Expectations As Global Markets Extend Declines

September 24, 2015

Briefly: In our opinion, no speculative positions are justified

Our intraday outlook is neutral, and our short-term outlook is neutral:

Intraday outlook (next 24 hours): neutral

Short-term outlook (next 1-2 weeks): neutral

Medium-term outlook (next 1-3 months): bearish

Long-term outlook (next year): bullish

The main US stock market indexes were mixed between -0.3% and 0.0% on Wednesday, following their recent decline. The S&P500 index continues to trade below the level of 2,000. The nearest important level of resistance is at around 1,950, marked by previous support level. On the other hand, support level is at 1,900-1,920, marked by local lows. There have been no confirmed positive signals so far. It still looks like a correction following late August sell-off:

Expectations before the opening of today's trading session are negative, with index futures currently down 0.8-0.9%. The European stock market indexes have lost 0.6-2.2% so far. Investors will now wait for some economic data announcements: Initial Claims, Durable Orders at 8:30 a.m., New Home Sales number at 10:00 a.m. The S&P500 futures contract (CFD) trades within an intraday downtrend, as it retraces its yesterday's rebound. The nearest important level of support is at around 1,900-1,910, and resistance level is at 1,930-1,950, among others, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it trades closer to the level of 4,200. The nearest important level of resistance is at around 4,280-4,300, and support level is at 4,200-4,220, as we can see on the 15-minute chart:

Concluding, the broad stock market fluctuated on Wednesday, as investors hesitated following recent move down. There have been no confirmed positive signals so far. It looks like an upward correction within a medium-term downtrend. We prefer to be out of the market, avoiding low risk/reward ratio trades. We will let you know when we think it is safe to get back in the market.


Courtesy of

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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