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Stock Trading Alert: Some Further Fluctuations As Indexes Remain Close To Record Highs - Which Direction Is Next?

Stock Trading Alert originally published on November 6, 2014, 6:28 AM:


 

Briefly: In our opinion, no speculative positions are justified.

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 main U.S. stock market indexes were mixed between -0.1% and +0.6% on Wednesday, as investors continued to hesitate following recent move up. There is no clear short-term direction. For now, it looks like a flat correction within an uptrend. The S&P 500 index remains close to Monday's all-time high of 2,024.46. The nearest important level of resistance is at around 2,020-2,025, and the support level is at 2,000, among others, as we can see on the daily chart:

S&P500 Daily Chart
Larger Image

Expectations before the opening of today's trading session are slightly negative, with index futures currently down 0.1-0.2%. The European stock market indexes have lost 0.2-0.4% so far. Investors will now wait for some further economic data announcements: Initial Claims, Productivity at 8:30 a.m. The S&P 500 futures contract (CFD) is in an intraday consolidation, as it fluctuates along the level of 2,015. The nearest important resistance level is at 2,015-2,020, and level of support remains at 2,000-2,010, as the 15-minute chart shows:

S&P500 15-Minute Chart
Larger Image

The technology Nasdaq 100 futures contract (CFD) is relatively weaker, as it bounced off the resistance level at around 4,170-4,180 yesterday. The nearest important level of support is at 4,130, marked by local lows. For now, it looks like a correction within a short-term uptrend:

NASDAQ 100 Futures 15-Minute Chart
Larger Image

Concluding, the broad stock market fluctuates following recent rally. There have been no confirmed negative signals so far. However, we can see some short-term overbought conditions which may lead to a downward correction at some point in time. 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.

Thank you.

 

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