Stock Trading Alert originally published on January 8, 2015, 6:30 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 gained 1.2% on Wednesday, retracing some of their recent sell-off, as investors hunted for bargains. The S&P 500 index bounced off support level at around 2,000, marked by previous local extremes, among others. The next support level is at 1,970-1,980, marked by December local lows. On the other hand, resistance level is at 2,040-2,050, marked by previous support level. For now, it looks like an upward correction within a short-term downtrend, which is within a volatile medium-term consolidation, as we can see on the daily chart:
Expectations before the opening of today's trading session are positive, with index futures currently up 0.8-0.9%. The main European stock market indexes have gained between 1.4% and 2.0% so far. Investors will now wait for some economic data announcements: Challenger Job Cuts report at 7:30 a.m., Initial Claims at 8:30 a.m. The S&P 500 futures contract (CFD) is in an intraday consolidation, following yesterday's move up. The nearest important resistance level is at around 2,040-2,050. On the other hand, support level remains at 2,000-2,020:
The technology Nasdaq 100 futures contract (CFD) is in a relatively narrow intraday trading range, following yesterday's rebound. The nearest important level of resistance is at around 4,190-4,200, marked by previous support level, as the 15-minute chart shows:
Concluding, the broad stock market retraced some of its recent sell-off on Wednesday, as investors reacted to oil prices rebound, among others. For now, it looks like a volatile medium-term consolidation following last year's October-November rally. 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.