No Clear Short-Term Direction As Investors Take Some Profits Following Recent Advance

October 30, 2014

Briefly:  In our opinion, no speculative positions are justified.

Our intraday outlook is now 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 0.2-0.4% on Wednesday, following quite volatile trading session, as investors reacted to FOMC Rate Decision release. Our yesterday’s neutral intraday outlook has proved accurate. However, the S&P 500 index extended its short-term uptrend slightly, as it got closer to the level of 2,000. The nearest important resistance level is at around 2,000-2,020, marked by September 19th all-time high of 2,019.26, among others. On the other hand, the level of support remains at 1,870-1,880, marked by previous resistance level. There have been no confirmed negative signals so far, however, we can see some short-term overbought conditions which may lead to a downward correction:

Expectations before the opening of today’s trading session are negative, with index futures currently down 0.3-0.5%. The main European stock market indexes have lost 0.8-1.6% so far. Investors will now wait for some economic data announcements: Initial Claims, GDP – Advance number at 8:30 a.m. The S&P 500 futures contract (CFD) is in a short-term consolidation, as it fluctuates along the level of 1,970. The level of resistance is at around 1,980-1,985, and the nearest support level is at 1,960, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract (CFD) retraced some of its recent move up, as it bounced off the resistance level at 4,100. The nearest important level of support is at around 4,050, as the 15-minute chart shows:

Concluding, the broad stock market extended its short-term consolidation, following the FOMC Decision announcement. There have been no confirmed negative signals so far. However, we can see some short-term overbought conditions which may lead to a downward correction. 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.

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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