Stocks Regain Some Ground After Recent Move Down

January 8, 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 gained 1.2% on Wednesday, retracing some of their recent sell-off, as investors hunted for bargains. The S&P 500 index bounced off support level at around 2,000, marked by previous local extremes, among others. The next support level is at 1,970-1,980, marked by December local lows. On the other hand, resistance level is at 2,040-2,050, marked by previous support level. For now, it looks like an upward correction within a short-term downtrend, which is within a volatile medium-term consolidation, as we can see on the daily chart:

Expectations before the opening of today’s trading session are positive, with index futures currently up 0.8-0.9%. The main European stock market indexes have gained between 1.4% and 2.0% so far. Investors will now wait for some economic data announcements: Challenger Job Cuts report at 7:30 a.m., Initial Claims at 8:30 a.m. The S&P 500 futures contract (CFD) is in an intraday consolidation, following yesterday’s move up. The nearest important resistance level is at around 2,040-2,050. On the other hand, support level remains at 2,000-2,020:

The technology Nasdaq 100 futures contract (CFD) is in a relatively narrow intraday trading range, following yesterday’s rebound. The nearest important level of resistance is at around 4,190-4,200, marked by previous support level, as the 15-minute chart shows:

Concluding, the broad stock market retraced some of its recent sell-off on Wednesday, as investors reacted to oil prices rebound, among others. For now, it looks like a volatile medium-term consolidation following last year’s October-November rally. 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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