Stock Trading Alert originally sent to subscribers on August 28, 2014, 6:34 AM.
Briefly: In our opinion, speculative short positions
are favored (with stop-loss at 2,030, and a profit target at 1,900, S&P 500
index)
Our
intraday outlook is bearish, and our short-term outlook is bearish:
Intraday
(next 24 hours) outlook: bearish
Short-term (next 1-2 weeks) outlook: bearish
Medium-term (next 1-3 months) outlook: neutral
Long-term outlook (next year): bullish
The main
U.S. stock market indexes were virtually flat on Wednesday, as investors
hesitated following recent rally. The S&P 500 index remains close to its
all-time high of 2,005.04, trading along the level of 2,000. The nearest important resistance level is at around 2,000-2,005. On the other hand, the level of support
is at 1,980-1,990, marked by some of the recent local lows. There have been no
confirmed negative signals so far. However, we can see negative divergences,
accompanied by some technical overbought conditions:
Expectations
before the opening of today’s session are negative, with index futures
currently down 0.3%. The European stock market indexes have lost 0.4-0.8% so
far. Investors will now wait for some economic data announcements: Initial
Claims, GDP – Second Estimate at 8:30 a.m., Pending Home Sales at 10:00 a.m. The
U.S. GDP figure will be closely watched as markets are expecting a confirmation
of an economic rebound. The S&P 500 futures contract (CFD) is in a descending
intraday channel, as it trades below the level of 2,000. The resistance level
is at around 2,000, and the nearest important level of support is at
1,980-1,985, among others, as we can see on the 15-minute chart:
The
technology Nasdaq 100 futures contract (CFD) is in an intraday downtrend, as it
trades below the level of 4,080. The resistance level remains at 4,080-4,100,
and the nearest important level of support is at around 4,050-4,060, as the
15-minute chart shows:
Concluding,
the broad stock market remains close to its all-time high. There have been no
confirmed uptrend reversal signals so far. However, we can see some negative
technical divergences. We remain cautiously pessimistic, expecting a downward
correction. Therefore, we continue to maintain our speculative short position (entry
point at 2,000.5 - S&P 500 index). The stop-loss is at 2,030, and potential
profit target at the level of 1,900 (S&P 500 index).
Thank you.
Paul Rejczak
Stock Trading Strategist
Stock Trading Alerts
