Stocks Set To Open Higher Following Long Holiday Weekend…Will Uptrend Continue?

September 2, 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 U.S. stock market indexes gained 0.1-0.4% on Friday, extending their short-term consolidation along record highs, as investors remained optimistic ahead of long holiday weekend. The S&P 500 index remains close to last Wednesday’s all-time high of 2,005.04. The level of resistance is at around 2,000-2,005, and the nearest important support level is at 1,985-1,990, among others. There have been no confirmed negative signals so far, however we still can see negative technical divergences, accompanied by some overbought condition which may lead to a downward correction:

Expectations before the opening of today’s session are positive, with index futures currently up between 0.2% and 0.3%. The main European stock market indexes have gained 0.2-0.9% so far. Investors will now wait for some economic data releases: ISM Index, Construction Spending at 10:00 a.m. The Institute of Supply Management Index is based on surveys of manufacturing firms, as it monitors employment, production inventories, supplier deliveries and new orders. Investors await higher corporate profits when this index is increasing. The S&P 500 futures contract (CFD) is in an  intraday uptrend, as it reaches new all-time high close to the level of 2,005. The nearest important support level remains at around 1,995-2,000, as we can see on the 15-minute chart:

The Nasdaq 100 futures contract (CFD) follows a similar path, as it trades closer to the level of 4,100. On the other hand, the nearest important level of support is at 4,070-4,080, marked by recent consolidation, as the 15-minute chart shows:

Concluding, the broad stock market is expected to continue its long-term uptrend today. However, we remain cautiously pessimistic, maintaining our speculative short position with entry point at 2,005 – S&P 500 index. The stop-loss is at 2,030 and potential profit target is at 1,900 (S&P 500 index).

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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