Stock Trading Alert originally sent to subscribers on September 24, 2014, 6:21 AM.
Briefly: In our opinion, speculative short
positions are favored (with stop-loss at 2,030 and 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 U.S.
stock market indexes gained 0.9-1.1% on Wednesday, retracing some of their
recent move down, as investors hoped for the end of a short-term downward
correction. The S&P 500 index got closer to the level of 2,000 again, as it
bounced off the support level at 1,980-1,985. The nearest important level of
resistance is at 2,000-2,020, marked by Friday’s all-time high of 2,019.26. The
market continues to fluctuate within a month-long consolidation, as we can see
on the daily chart:
Expectations
before the opening of today’s session are virtually flat. The main European
stock market indexes have been mixed so far. Investors will now wait for some
economic data announcements: Initial Claims, Durable Orders at 8:30 a.m. The
S&P 500 futures contract (CFD) is in a relatively narrow intraday trading
range, following yesterday’s move up. The resistance level remains at around
2,000, and the nearest important level of support is at 1,965-1,970, marked by recent
local lows, as the 15-minute chart shows:
The
technology Nasdaq 100 futures contract (CFD) followed a similar path, as it
bounced off the support level of 4,030-4,035. The nearest important level of
resistance is at around 4,090-4,100. The price remains within short-term consolidation:
Concluding,
the broad stock market retraced its recent sell-off, as the S&P 500 index
got closer to the level of 2,000. Based on my experience, medium-term
divergences seem more important than the lack of clarity for the short term. We
remain bearish, expecting a downward correction or uptrend reversal. Therefore,
we continue to maintain our already profitable speculative short position with
entry point at 2,000.5 – S&P 500 index. The stop-loss is at the level of
2,030 and potential profit target is at 1,900 (S&P 500 index). 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.
Thank you.
Paul Rejczak
Stock Trading Strategist
Stock Trading Alerts
