Stock Market Trading At New Record Highs As Investors' Sentiment Further Improves

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 neutral, following S&P 500 index breakout above last year's all-time high:

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

The main U.S. stock market indexes gained 0.6-0.8% on Friday, extending their short-term uptrend, as investors reacted to economic data releases, among others. The S&P 500 index has reached yet another new all-time high at the level of 2,259.80. The nearest important level of support is at around 2,240-2,250, marked by previous level of resistance. The next important support level remains at 2,200-2,220. The market broke above its medium-term upward trend line recently, as we can see on the daily chart:

Expectations before the opening of today's trading session are mixed following an overnight rally. The European stock market indexes have lost 0.1-0.4% so far. The S&P 500 futures contract trades within an intraday consolidation, along its Friday's closing price. The nearest important level of resistance is at around 2,270, marked by new record high. On the other hand, support level is at 2,245-2,250, among others. There have been no confirmed negative signals so far. However, we can see short-term overbought conditions:

The technology Nasdaq 100 futures contract is relatively weaker than the broad stock market, as it currently trade below its Friday's closing price. The nearest important level of resistance is at around 4,900-4,920, marked by local highs. On the other hand, support level is at 4,840-4,850, marked by some recent fluctuations, as the 15-minute chart shows:

Concluding, the broad stock market reached yet another new all-time high on Friday, as the S&P 500 index broke above 2,250 mark. We still can see technical overbought conditions. However, there have been no confirmed negative signals so far. Our speculative short position has been closed on Wednesday at the stop-loss level of 2,240 (S&P 500 index). We lost 63 index points on that trade, betting against short-term uptrend off early November local low. 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. 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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