Indexes Search For New Direction Following August Rally

September 8, 2014

Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,030 and a profit target at 1,900, 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 main U.S. stock market indexes gained between 0.4% and 0.6% extending their recent consolidation, as investors reacted positively to worse-than-expected monthly jobs data release. The S&P 500 index remains relatively close to its all-time high of 2,011.17. The resistance level is at around 2,000-2,010. On the other hand, the nearest level of support is at 1,985-1,990, marked by recent local lows. There have been no confirmed negative signals. However, we can see negative technical divergences, accompanied by overbought conditions:

Expectations before the opening of today’s session are slightly negative, with index futures currently down 0.1-0.2%. The European stock market indexes have been mixed between -0.8% and 0.0% so far. The S&P 500 futures contract (CFD) Continues to fluctuate along the level of 2,000. The nearest important level of resistance remains at around 2,005-2,010, and the support level is at 1,990, among others:

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it trades slightly below the level of 4,100. The resistance level is at 4,100-4,115, and the nearest important level of support remains at 4,050-4,060, marked by recent local lows, as we can see on the 15-minute chart:

Concluding, the broad stock market remains relatively close to all-time high as the S&P 500 index continues to fluctuate along the level of 2,000. We remain bearish, expecting a downward correction or uptrend reversal. Therefore, we continue to maintain our speculative short position. The stop-loss is at the level of 2,030 and potential profit target is at 1,900 (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.

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