Stock Trading Alert: Stocks Extend Their Medium-Term Fluctuations, No Clear Direction Yet
Stock Trading Alert originally published on February 9, 2015, 6:36 AM:
Briefly: In our opinion, no speculative positions are justified.
Our intraday outlook remains neutral, and our short-term outlook is neutral:
Intraday outlook (next 24 hours): neutral
Short-term outlook (next 1-2 weeks): neutral
Medium-term outlook (next 1-3 months): neutral
Long-term outlook (next year): bullish
The U.S. stock market indexes lost 0.3-0.7% on Friday, retracing some of their recent move up, as investors reacted to economic data releases, among others. The S&P 500 index continues to trade along the level of 2,060. The nearest important level of support is at around 2,070-2,080. On the other hand, support level is at 2,050, marked by previous resistance level. The index remains within three-month long consolidation following last year's October-November rally, as we can see on the daily chart:
Expectations before the opening of today's trading session are negative, with index futures currently down 0.4%. The main European stock market indexes have lost between 0.5% and 1.3% so far. The S&P 500 futures contract (CFD) is in an intraday consolidation following Friday's move down. The nearest important level of resistance is at 2,045-2,00. On the other hand, support level is at 2,035-2,040. There is no clear short-term direction, as the 15-minute chart shows:
The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it trades along the level of 4,200. The nearest important resistance level is at 4,210-4,220. For now, it looks like a downward corection within a short-term uptrend:
Concluding, the broad stock market retraced some of its recent gains on Friday, as investors took profits off the table. We still 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.