Stock Trading Alert originally sent to subscribers on August 18, 2014, 6:27 AM.
Briefly: In our opinion, speculative short positions
are favored (with stop-loss at 1,970 and a profit target at 1,850, S&P 500
index)
Our
intraday outlook is bearish, and our short-term outlook remains 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 U.S.
stock market indexes were mixed between -0.3% and +0.5% on Friday, following volatile
trading session, as investors reacted to some geopolitical news concerning
Russia-Ukraine conflict, among others. The S&P 500 index retraced more than
half of its late July – early August decline, however, closing slightly below Fibonacci’s
61.8% retracement of 1,958.3 (with the daily high at 1,964.04). The resistance level is at around 1,970-1,980, marked by previous local highs, and the next
resistance is at 1,990-2,000, marked by July 24 all-time high of 1,991.39. It
still looks like a correction within a short-term uptrend, however, a bullish
scenario cannot be excluded here:
Expectations
before the opening of today’s session are positive, with index futures
currently up 0.5%. The main European stock market indexes have gained 0.6-1.4%
so far. The S&P 500 futures contract (CFD) is in a relatively narrow
intraday trading range, fluctuating along Friday’s highs. The nearest important
resistance level is at around 1,960-1,965, marked by some of the previous local
extremes. On the other hand, the level of support remains at 1,940, among
others, as we can see on the 15-minute chart:
The
technology Nasdaq 100 futures contract (CFD) reaches new long-term highs, as it
trades close to the level of 4,000. The nearest important support level is at
around 3,950-3,970, as the 15-minute chart shows:
Concluding,
the broad stock market continues its recent move up, as it retraces more than
half of the late July – early August sell-off. Is this a new uptrend or just a
strong upward correction? We remain cautiously pessimistic, maintaining our
speculative short position, with stop-loss at 1,970 (S&P 500 index). So, the
price currently tracks dangerously close to our stop-loss figure. 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 to limit
potential losses while letting the gains grow.
Thank you.
Paul Rejczak
Stock Trading Strategist
Stock Trading Alerts
