Stock Trading Alert: Short-Term Uncertainty As Investors Take Profits Following December Rally
Stock Trading Alert originally published on January 5, 2015, 6:20 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 U.S. stock market indexes were virtually flat on Friday, following recent move down, as investors reacted to some mixed economic data announcements. Our Friday's neutral intraday outlook has proved accurate. However, the S&P 500 index managed to extend its short-term downtrend, as it violated support level at 2,050. The nearest important level of resistance remains at around 2,070-2,080, marked by previous support level. For now, it looks like a downward correction within an uptrend, however, a negative uptrend reversal scenario cannot be excluded here:
Expectations before the opening of today's trading session are negative, with index futures currently down 0.2%. The main European stock market indexes have lost 0.4-0.7% so far. The S&P 500 index is in an intraday consolidation, as it trades along the level of 2,040. The nearest important level of support is at 2,035-2,040, marked by recent local lows. The nearest important resistance level is at around 2,050, as we can see on the 15-minute chart:
The technology Nasdaq 100 futures contract (CFD) continues to trade along the level of 4,200, with level of support at around 4,195, and the nearest important resistance level at 4,220-4,230, marked by some recent local extreme levels, as the 15-minute chart shows:
Concluding, the broad stock market extended its short-term downtrend on Friday, before closing virtually flat. For now, it looks like a correction within an uptrend. Therefore, we prefer to be out of the market, avoiding low risk/reward ratio trades. We will let you know when we think it is safe to get back in the market.