Stock Trading Alert originally sent to subscribers on October 13, 2014, 6:30 AM.
Briefly: In our opinion, no speculative
positions are justified at this moment. We will close our profitable short
position with entry price of 2,000.5 (on August 27th, S&P 500
index) at the open of today’s trading session (cash market), as the S&P 500
is reaching our potential profit target of 1,900.
Our
intraday outlook is 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 U.S.
stock market indexes lost between 0.7% and 2.5% on Friday, extending their
recent downtrend, as investors continued to sell stocks ahead of corporate
quarterly earnings releases, among others. Our Friday’s bearish intraday outlook
has proved accurate. The S&P 500 index got close to the level of 1,900, as
it reached level of support marked by the early August local low and April-May
consolidation. On the other hand, the nearest important resistance level is at
around 1,920-1,925, marked by recent local lows, as we can see on the daily
chart:
Expectations
before the opening of today’s trading session are slightly positive, with index
futures currently up 0.1-0.2%. The main European stock market indexes have
gained 0.1-0.5% so far. The S&P 500 futures contract (CFD) extended its
downtrend earlier in the morning. However, it later managed to bounce off the
support level at around 1,880. The nearest important level of resistance is at
1,900, marked by previous support level, as the 15-minute chart shows:
The
technology Nasdaq 100 was relatively weaker as it accelerated a sell-off,
getting closer to the level of 3,800. The nearest important support level is at
around 3,800-3,820. On the other hand, the level of resistance is at
3,880-3,900, among others:
Concluding,
the broad stock market accelerated its downtrend on Friday, breaking below last
week’s consolidation. The S&P 500 index has almost reached our profit
target level at 1,900. So, we decided to close our speculative short position at
the open of today’s trading session (cash market). There are some short-term
oversold conditions which may lead to an upward correction or downtrend
reversal. Therefore, we prefer to be out of the market at this moment. We will
let you know when we think it is safe to get back in the market.
Thank you.
Paul Rejczak
Stock Trading Strategist
Stock Trading Alerts
