Short-Term Uncertainty As Investors Take Profits Following December Rally

January 5, 2015

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 were virtually flat on Friday, following recent move down, as investors reacted to some mixed economic data announcements. Our Friday’s neutral intraday outlook has proved accurate. However, the S&P 500 index managed to extend its short-term downtrend, as it violated support level at 2,050. The nearest important level of resistance remains at around 2,070-2,080, marked by previous support level. For now, it looks like a downward correction within an uptrend, however, a negative uptrend reversal scenario cannot be excluded here:

Expectations before the opening of today’s trading session are negative, with index futures currently down 0.2%. The main European stock market indexes have lost 0.4-0.7% so far. The S&P 500 index is in an intraday consolidation, as it trades along the level of 2,040. The nearest important level of support is at 2,035-2,040, marked by recent local lows. The nearest important resistance level is at around 2,050, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract (CFD) continues to trade along the level of 4,200, with level of support at around 4,195, and the nearest important resistance level at 4,220-4,230, marked by some recent local extreme levels, as the 15-minute chart shows:

Concluding, the broad stock market extended its short-term downtrend on Friday, before closing virtually flat. For now, it looks like a correction within an uptrend. Therefore, 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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