Uncertainty Following Recent Move Up – Will Uptrend Extend Even Further?

November 13, 2014

Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,085 and profit target at 1,950, S&P500 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 were virtually flat on Wednesday, as investors continued to hesitate following recent move up. The S&P 500 index remains close to Thursday’s all-time high of 2,041.28. The nearest important resistance level is at around 2,040-2,050. On the other hand, the level of support is at 2,020-2,025, marked by previous local extremes. There have been no confirmed negative signals so far, however, we can see short-term overbought conditions:

stock market indexes

Expectations before the opening of today’s trading session are positive, with index futures currently up 0.3%. The main European stock market indexes have gained 0.4-0.9% so far. Investors will now wait for some economic data announcements: Initial Claims at 8:30 a.m., JOLTS – Job Openings at 10:00 a.m. The S&P 500 futures contract (CFD) is in an intraday uptrend, as it trades close to new all-time high. The resistance level is at around 2,050, and the nearest important level of support is at around 2,035-2,040, marked by previous local extremes, as we can see on the 15-minute chart:

index futures

The technology Nasdaq 100 futures contract (CFD) is relatively stronger, as it trades above the level of 4,200. The nearest important support level is at around 4,180, marked by previous level of resistance. There have been no confirmed negative signals so far, as the 15-minute chart shows:

technology nasdaq 100 futures

Concluding, the broad stock market remains close to all-time highs, as it extends recent fluctuations. We expect a downward correction or an uptrend reversal. Therefore, we continue to maintain our 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.

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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