Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Short-Term Uncertainty As Stocks Hover Along Record Highs

Published 08/01/2016, 10:07 AM
Updated 05/14/2017, 06:45 AM

Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,210, and profit target at 2,050, S&P 500 index).

Our intraday outlook is bearish, and our short-term outlook is bearish. Our medium-term outlook is now 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 were mixed between -0.1% and +0.2% on Friday, extending their short-term fluctuations, as investors reacted to economic data announcements. The S&P 500 index has managed to reach yet another new all-time high at the level of 2,177.09. The nearest important level of resistance remains at 2,175-2,180, and the next potential resistance level is at 2,200. On the other hand, support level is at around 2,150-2,155, marked by short-term local lows. The next important support level is at 2,130-2,135, marked by previous level of resistance. There have been no confirmed negative signals so far. However, we can see some short-term overbought conditions accompanied by negative technical divergences:

S&P 500 Average True 17.1604

Expectations before the opening of today's trading session are virtually flat, following an overnight move higher. The main European stock market indexes have been mixed so far. Investors will now wait for some economic data announcements: Construction Spending, ISM Index at 10:00 a.m. The S&P 500 futures contract trades within an intraday consolidation, as it fluctuates along the level of 2,170. The nearest important level of resistance is at around 2,175-2,180. On the other hand, support level is at 2,150-2,160, among others, as we can see on the 15-minute chart:

S&P 500 Average True 1.31064

The technology Nasdaq 100 futures contract follows a similar path, as it currently trades along its new all-time high. The nearest important level of resistance is at around 2,740, and support level is at 4,700, among others. There have been no confirmed negative signals so far. However, we can see some short-term technical overbought conditions:

Nasdaq Average True 2.95557

Concluding, the broad stock market trades along its record highs, as the S&P 500 index gets closer to 2,200 mark. We still can see short-term overbought conditions accompanied by bearish technical divergences. Therefore, we continue to maintain our speculative short position (opened on July 18th at 2,162, S&P 500 index). Stop-loss level is at 2,210 and potential profit target is at 2,050 (S&P 500 index). You can trade S&P 500 index using futures contracts E-mini S&P 500 futures or an ETF like the SPDR S&P 500 ETF (NYSE: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.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.