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 between 1.6% and 1.7% on Wednesday, extending their short-term uptrend, as investors reacted to some economic data releases, among others. The S&P 500 index retraced most of its recent "Brexit" move down, as it broke above resistance level of 2,050. The nearest important level of support is at around 2,040, marked by yesterday's daily gap up of 2,036.09-2,042.69. The next support level is at 2,000. On the other hand, resistance level is at around 2,080-2,100, marked by recent consolidation. The next level of resistance remains at 2,110-2,120, marked by this month's local highs. Last year's highs along the level of 2,100 continue to act as medium-term resistance level. Is this some long-term topping pattern or just medium-term consolidation following a rebound off February low?

Expectations before the opening of today's trading session are slightly positive, with index futures currently up 0.2%. The European stock market indexes have gained 0.1-0.6% so far. Investors will now wait for some economic data releases: Initial Claims at 8:30 a.m., Chicago PMI number at 9:45 a.m. The S&P 500 futures contract trades within an intraday consolidation, as it currently fluctuates along the level of 2,070. The nearest important level of support is at 2,055-2,060, and the next support level remains at 2,030, marked by short-term consolidation. On the other hand, resistance level is at around 2,100-2,120, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract follows a similar path, as it currently trades along the level of 4,360, following a rebound off support level at around 4,330-4,350. The nearest important level of resistance is at 4,370-4,380, marked by local highs, as the 15-minute chart shows:

Concluding, the broad stock market retraced most of its recent move down yesterday, as investors shrugged off "Brexit" news. For now, it looks like an upward correction following recent selloff. We decided to close our speculative short position (opened on June 1 at 2,093.94 - S&P 500 index) at the opening of last week's Friday's trading session - the average opening price of the S&P 500 index was at 2,060. Overall, we gained around 34 index points on that trade. Currently, we 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.

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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