Stock Trading Alert: Stocks Fluctuate Following Month-Long Rally - Will It Continue?
Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,150 and profit target at 1,980, S&P 500 Index)
Our intraday outlook is bearish, and our short-term outlook is bearish:
Intraday outlook (next 24 hours): bearish
Short-term outlook (next 1-2 weeks): bearish
Medium-term outlook (next 1-3 months): neutral
Long-term outlook (next year): bullish
The U.S. stock market indexes were mixed between -0.2% and +0.5% on Friday, as investors continued to hesitate following recent move up. The S&P 500 index remains close to its Wednesday's all-time high of 2,119.59. The nearest important level of resistance is at around 2,115-2,2120. On the other hand, support level is at 2,000-2,010, marked by previous resistance level. There have been no confirmed negative signals so far. However, we can see overbought conditions accompanied by negative divergences:
Expectations before the opening of today's trading session are slightly negative, with index futures currently down 0.1-0.2%. Investors will now wait for some economic data announcements: U.S. GDP - Second Estimate at 8:30 a.m., Chicago PMI at 9:45 a.m., Michigan Sentiment, Pending Home Sales at 10:00 a.m. The S&P 500 futures contract (CFD) is within an intraday consolidation, following yesterday's move down. The nearest important level of support is at around 2,100-2,150, marked by yesterday's local lows. On the other hand, resistance level is at 2,110-2,115, among others, as we can see on the 15-minute chart:
The technology Nasdaq 100 futures contract (CFD) is relatively stronger, as it fluctuates slightly below its long-term high. The nearest important level of resistance is at around 4,460-4,470, and the next resistance level is at 4,500, as the 15-minute chart shows:
Concluding, the broad stock market retraced some of its recent advance yesterday, as short-term volatility slightly increased. There have been no confirmed negative signals. However, we continue to maintain our speculative short position (S&P 500 index), as we expect downward correction or an uptrend reversal. Stop-loss is at 2,150, and potential profit target is at 1,980. You can trade S&P 500 index using futures contracts (S&P 500 futures contract - SP, E-mini S&P 500 futures contract - ES) or an ETF like the SPDR S&P 500 ETF - SPY. It is always important to set some exit price level in case some events cause the price to move in the unlikely direction. Having safety measures in place helps limit potential losses while letting the gains grow.
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.