Stocks Sold Off Following Negative Global Economic Outlook
Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,085 and profit target at 1,950, S&P 500 index).
Our intraday outlook is bearish, and our short-term outlook is bearish:
Intraday (next 24 hours) outlook: bearish
Short-term (next 1-2 weeks) outlook: bearish
Medium-term (next 1-3 months) outlook: neutral
Long-term outlook (next year): bullish
The U.S. stock market indexes lost 1.5-1.6% on Wednesday, extending their short-term downtrend, as investors reacted to worsening global economic conditions. The S&P 500 index broke below its early November consolidation, as it got closer to the level of 2,000. The nearest important level of support is at around 2,000-2020. On the other hand, resistance level is at around 2,040-2,050, marked by previous local lows, among others. For now, it looks like a correction within an uptrend, however, a negative reversal scenario cannot be excluded here:
Expectations before the opening of today’s trading session are slightly positive, with index futures currently up 0.1-0.2%. The European stock market indexes have been mixed so far. Investors will now wait for some economic data announcements: Initial Claims, Retail Sales at 8:30 a.m., Business Inventories at 10:00 a.m. The S&P 500 futures contract (CFD) bounces off support level at around 2,020-2,025. The nearest important level of resistance remains at 2,030-2,035, marked by recent local low, and the next resistance level is at 2,050-2,060, as we can see on the 15-minute chart:
The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it bounces off support level at around 4,200-4,220. The nearest important level of resistance is at around 4,250-4,260, marked by previous support level, among others, as the 15-minute chart shows:
Concluding, the broad stock market extended its short-term downtrend. We continue to maintain our already profitable speculative short position. Stop-loss is at 2,085 and potential profit target is at 1,950 (S&P 500 index). 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.