Stock Trading Alert originally sent to subscribers on September 22, 2014, 5:55 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 U.S.
stock market indexes were virtually flat on Friday, extending their short-term
uncertainty, as investors continued to take some profits following recent move
up. The S&P 500 index has managed to reach yet another new all-time high at
the level of 2,019.26, before closing slightly below its early September top.
There have been no confirmed negative signals, however, we still can see
medium-term overbought conditions accompanied by negative technical divergences
which are likely to lead to a correction:
Expectations
before the opening of today’s session are negative, with index futures
currently down 0.3-0.6%. The main European stock market indexes have lost
0.2-0.6% so far. Investors will now wait for the Existing Home Sales number at
10:00 a.m. The S&P 500 futures contract (CFD) is in an intraday downtrend,
as it retraces recent move up. The resistance level remains at around
2,010-2,015, and the nearest important level of support is at 1,990, marked by
local low, as we can see on the 15-minute chart:
The technology
Nasdaq 100 futures contract (CFD) follows a quite similar path as it retraces
last week’s gains. The level of resistance is at around 4,115-4,120. On the
other hand, the nearest important support level is at 4,050-4,060, marked by
previous local extremes, as the 15-minute chart shows:
Concluding,
the broad stock market resumed its uptrend as it reached new record high on
Friday. However, we remain bearish, expecting a downward correction or uptrend
reversal. Based on my experience, medium-term divergences seem more important
than the lack of clarity for the short term. Therefore, we continue to maintain
our speculative short position. 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
