Stock Trading Alert originally sent to subscribers on July 17, 2014, 6:58 AM.
Briefly: In our opinion, no speculative
positions are justified.
Our
intraday outlook remains neutral, and our short-term outlook is neutral:
Intraday
(next 24 hours) outlook: neutral
Short-term (next 1-2 weeks) outlook: neutral
Medium-term (next 1-3 months) outlook: neutral
Long-term outlook (next year): bullish
The main
U.S. stock market indexes gained 0.4-0.5% on Wednesday, extending their
short-term move up, as investors reacted to some better-than-expected quarterly
earnings releases. The S&P 500 index remains close to its July 3 all-time
high of 1,985.59. It is still above two-month-long upward trend line, which is
positive. The upward trend line is a straight line that is drawn under pivot
lows to show the direction of price. Trend lines are an important tool in
technical analysis for both trend identification and a confirmation. As long as
price remains above the upward trend line, the uptrend is considered intact. The
resistance level is at around 1,980-1,985, and the next resistance is at the psychological
2,000. On the other hand, the level of support remains at 1,950-1,960, marked
by recent local lows. There have been no confirmed negative signals so far, as
we can see on the daily chart:
Expectations
before the opening of today’s session are negative, with index futures
currently down 0.3-0.5%. The European stock market indexes have lost between
0.5% and 0.9%. Investors will now wait for some economic data announcements:
Initial Claims, Housing Starts, Building Permits at 8:30, Philadelphia Fed index
at 10:00 a.m. The S&P 500 futures contract (CFD) is in a short-term
consolidation, as it fluctuates slightly below its all-time high. The
resistance level is at around 1,975, and the nearest important level of support
is at 1,960, marked by recent local low, as the 15-minute chart shows:
The
technology Nasdaq 100 futures contract (CFD) has reached a new long-term high
yesterday, close to the resistance level of 3,940. The nearest important
support level is at 3,880-3,900. There have been no confirmed uptrend reversal
signals so far. However, the market may be forming some sort of a topping
pattern here:
Concluding,
the broad stock market extends its consolidation along the level of its
all-time high. There have been no confirmed negative signals so far. On the
other hand, the upward potential seems limited here amid caution ahead of
possible Fed policy tightening. We think that it is better to stay out of the
market at this moment, as quarterly earnings releases, economic data
announcements may lead to increased volatility, especially following recent
run-up. So, it may be better
to cut back on your trading or even move to the sidelines completely, just to
avoid low risk/reward ratio trades. We will let you know when we think it is
safe to get back in the market.
Due to a
holiday break, beginning from this Friday until Monday, July 28, there will be
no Stock Trading Alerts. We apologize for inconvenience.
Thank you.
Paul Rejczak
Stock Trading Strategist
Stock Trading Alerts
