Stock Market New Short-Term Highs As Investors Await Quarterly Earnings Releases

By: Paul_Rejczak

Briefly: In our opinion, no speculative positions are justified.

Our intraday outlook is neutral, and our short-term outlook is neutral. Our medium-term outlook remains bearish, as the S&P 500 index extends its lower highs, lower lows sequence:

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

The main U.S. stock market indexes gained 0.6-1.1% on Friday, extending their short-term uptrend, as investors reacted to monthly jobs report release. The S&P 500 index got close to its late December high of 2,081.56. The nearest important level of resistance is at around 2,080. The next resistance level is at 2,100-2,120, marked by previous medium-term highs. On the other hand, support level remains at 2,055-2,060, marked by last week's Wednesday's daily gap up of 2,055.91-2,058.27. The next support level remains at 2,000, marked by previous level of resistance. There have been no confirmed negative signals so far. However, we can see technical overbought conditions. The index continues to trade within a slightly descending medium-term trading channel, as the daily chart shows:

Expectations before the opening of today's trading session are positive, with index futures currently up %. The European stock market indexes have gained % so far. Investors will now wait the Factory orders data release at 10:00 a.m. The S&P 500 futures contract trades within an intraday uptrend, as it reaches new short-term highs. The nearest important level of resistance is at around 2,075-2,080, marked by some previous medium-term local highs. The nearest important level of support is at 2,050, and the next support level is at 2,030, marked by recent local low, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract follows a similar path, as it extends its short-term uptrend. The nearest important level of support is at around 4,500, marked by previous resistance level. On the other hand, potential resistance level is at 4,600. There have been no confirmed negative signals so far. However, we can see short-term overbought conditions:

Concluding, the broad stock market continued its short-term uptrend on Friday, as investors reacted to monthly jobs data announcement, among others. The S&P 500 index is getting closer to its last year's medium-term highs. Will it break above the crucial long-term resistance level of 2,100-2,150 this time? Or is this just an upward move within a slightly descending medium-term trading channel? We can see some short-term technical overbought conditions. However, there have been no confirmed negative signals. We still prefer to be out of the market, avoiding low risk/reward ratio trades. We will let you know when we think it is safe to get back in the market.

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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