Stock Trading Alert originally published on December 11, 2014, 6:38 AM:
Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,085 and profit target at 1,950, S&P 500 index).
Our intraday outlook is bearish, and our short-term outlook is bearish:
Intraday (next 24 hours) outlook: bearish
Short-term (next 1-2 weeks) outlook: bearish
Medium-term (next 1-3 months) outlook: neutral
Long-term outlook (next year): bullish
The U.S. stock market indexes lost 1.5-1.6% on Wednesday, extending their short-term downtrend, as investors reacted to worsening global economic conditions. The S&P 500 index broke below its early November consolidation, as it got closer to the level of 2,000. The nearest important level of support is at around 2,000-2020. On the other hand, resistance level is at around 2,040-2,050, marked by previous local lows, among others. For now, it looks like a correction within an uptrend, however, a negative reversal scenario cannot be excluded here:
Expectations before the opening of today's trading session are slightly positive, with index futures currently up 0.1-0.2%. The European stock market indexes have been mixed so far. Investors will now wait for some economic data announcements: Initial Claims, Retail Sales at 8:30 a.m., Business Inventories at 10:00 a.m. The S&P 500 futures contract (CFD) bounces off support level at around 2,020-2,025. The nearest important level of resistance remains at 2,030-2,035, marked by recent local low, and the next resistance level is at 2,050-2,060, as we can see on the 15-minute chart:
The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it bounces off support level at around 4,200-4,220. The nearest important level of resistance is at around 4,250-4,260, marked by previous support level, among others, as the 15-minute chart shows:
Concluding, the broad stock market extended its short-term downtrend. We continue to maintain our already profitable speculative short position. Stop-loss is at 2,085 and potential profit target is at 1,950 (S&P 500 index). It is always important to set some exit price level in case some events cause the price to move in the unlikely direction. Having safety measures in place helps limit potential losses while letting the gains grow.