More Short-Term Stock Market Uncertainty Following Economic Data, Earnings Releases

By: Paul_Rejczak

Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,180, and profit target at 2,020, 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 U.S. stock market indexes lost between 0.1% and 0.6% on Friday, as investors reacted to economic data, quarterly earnings releases, among others. The S&P 500 index continues to trade below its resistance level of 2,150. There has been no clear short-term direction so far. The next resistance level is at 2,170-2,180, marked by some previous local highs. On the other hand, level of support is at 2,130, and the next support level 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 positive, with index futures currently up 0.1-0.3%. The European stock market indexes have lost 0.4-0.8% so far. Investors will now wait for some economic data announcements: Personal Income, Personal Spending, Core PCE Price Index at 8:30 a.m., Chicago PMI number at 10:00 a.m. The S&P 500 futures contract trades within an intraday consolidation, following a rebound off support level at around 2,100-2,110. The nearest important level of resistance remains at 2,140-2,150, marked by some previous local highs. There have been no confirmed positive signals so far.

The technology Nasdaq 100 futures contract follows a similar path, as it currently trades within an intraday consolidation, after rebounding off support level at 4,780-4,800. The nearest important resistance level is at 4,820-4,850, marked by previous support level, as we can see on the 15-minute chart:

Concluding, the broad stock market extended its short-term consolidation on Friday, as the S&P 500 index remained below its resistance level of 2,150. For now, it looks like a flat correction within a downtrend. Therefore, we continue to maintain our speculative short position (opened on July 18th at 2,162, S&P 500 index). However, on Friday we decided to move our stop-loss level from 2,210 down to 2,180 (S&P 500 index). We also decided to move our potential profit target level from 2,050 down to 2,020 (S&P 500 index). You can trade S&P 500 index using futures contracts (S&P 500 futures contract - SP, E-mini S&P 500 futures contract - ES) or an ETF like the SPDR S&P 500 ETF - 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.

There will be no Stock Trading Alert on Tuesday, November 1. We apologize for inconvenience.

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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