Stock Market Short-Term Uncertainty, Is Correction Over?

By: Paul_Rejczak

Briefly: In our opinion speculative long positions are still favored (with stop-loss at 1,910, S&P 500 index).

Our intraday outlook is neutral, and our short-term outlook remains bullish:

Intraday (next 24 hours) outlook: neutral
Short-term (next 1-2 weeks) outlook: bullish
Medium-term (next 1-3 months) outlook: neutral
Long-term outlook (next year): bullish

The main U.S. stock market indexes gained 0.3% on Friday, retracing some of their recent decline, as investors bet that stocks would resume long-term uptrend following last week’s downward correction. The S&P 500 index bounced off the support level of 1,915-1,925, marked by late May – early June consolidation. On the other hand, the resistance remains at 1,950-1,955, marked by June 09 all-time high of 1,955.55. For now, it looks like a correction within an uptrend, however, some further move down cannot be excluded. The important support level remains at the psychological 1,900, as we can see on the daily chart:

Expectations before the opening of today’s session are slightly negative, with index futures currently down 0.2-0.3%. The European stock market indexes have lost between 0.2% and 0.5% so far. Investors will now wait for some economic data announcements: Empire Manufacturing number at 8:30 a.m., Industrial Production, Capacity Utilization at 9:15 a.m., NAHB Housing Market Index at 10:00 a.m. The S&P 500 futures contract (CFD) extends its short-term consolidation, as it trades along the level of 1,930. For now, it looks like a flat correction following last-week’s decline. However, there is some relatively strong support level at around 1,915-1,925, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it fluctuates in a relatively narrow trading range. The resistance remains at the psychological 3,800. On the other hand, the support level is at 3,750, among others:

Concluding, the broad stock market is in a short-term consolidation, following recent move down. It is hard to say whether this is a correction within a new downtrend, or some sort of a bottoming consolidation. We remain cautiously optimistic, expecting more upside. Therefore, we continue to maintain our already profitable long position, with stop-loss at 1,910 (S&P 500 index).

Thank you.

Paul Rejczak
Stock Trading Strategist
Stock Trading Alerts
SunshineProfits.com

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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Disclaimer

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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