Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,210, and profit target at 2,050, S&P 500 index).
Our intraday outlook is bearish, and our short-term outlook is bearish. Our medium-term outlook is neutral, following S&P 500 index breakout above last year's all-time high:
- Intraday outlook (next 24 hours): bearish
- Short-term outlook (next 1-2 weeks): bearish
- Medium-term outlook (next 1-3 months): neutral
- Long-term outlook (next year): neutral
The main U.S. stock market indexes were mixed between -0.3% and +0.3% on Friday, extending their short-term fluctuations, as investors reacted to economic data, quarterly corporate earnings releases. The S&P 500 index continues to trade close to its resistance level of 2,150. The next resistance level is at 2,170, among others. On the other hand, level of support is at 2,115-2,120, marked by previous local lows. The market continues to trade along medium-term upward trend line, as the daily chart shows:
Expectations before the opening of today's trading session are very positive, with index futures currently up 0.4-0.6%. The European stock market indexes have gained 0.1-0.8% so far. The S&P 500 futures contract trades within an intraday uptrend, following Friday's rebound off support level at around 2,120. The nearest important level of resistance is at 2,150-2,170, marked by previous consolidation. There have been no confirmed short-term negative signals so far.
The technology Nasdaq 100 futures contract follows a similar path, as it currently trades closer to its all-time high at around 4,900. The nearest important resistance level is at 4,880-4,900. On the other hand, support level remains at 4,800-4,820, marked by some previous local lows, as we can see on the 15-minute chart:
Concluding, the broad stock market extended its short-term consolidation on Friday, as investors continued to hesitate following economic data, quarterly corporate earnings releases. We continue to maintain our speculative short position (opened on July 18 at 2,162, S&P 500 index). Stop-loss level is at 2,210 and potential profit target is at 2,050 (S&P 500 index). You can trade S&P 500 index using futures contracts (E-mini S&P 500 futures) or an ETF like the SPDR S&P 500 ETF (NYSE:SPY) - SPY. 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.