Stock Trading Alert originally published on January 15, 2015, 6:10 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 lost between 0.5% and 1.1% on Wednesday, extending their short-term move down. However, the S&P 500 index bounced off support level at 1,990-2,000, as it remained within three-month long consolidation. The nearest important level of resistance is at around 2,020, marked by previous support level, as we can see on the daily chart:
Expectations before the opening of today's trading session are negative, with index futures currently down 0.4-0.5%, as investors react to Swiss National Bank decision to remove its euro exchange cap. The main European stock market indexes have lost 0.2-0.6% so far. Investors will now wait for some economic data announcements: Initial Claims, Producer Price Index, Empire Manufacturing number at 8:30 a.m., Philadelphia Fed at 10:00 a.m. The S&P 500 futures contract (CFD) fluctuates following yesterday's move down. The nearest important resistance level remains at around 2,020. On the other hand, support level is at 1,980, marked by local low. 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 extends its short-term fluctuations. Support level remains at around 4,090-4,100, and the nearest important level of resistance is at 4,180-4,200, among others:
Concluding, the broad stock market slightly extended its recent move down yesterday. However, there is still no clear short-term direction. 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.