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Paul Rejczak

Paul Rejczak

Stock market strategist, who has been known for quality of his technical and fundamental analysis since the late nineties. He is interested in forecasting market…

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Stock Trading Alert: Mixed Expectations Following Friday's Move Down

Stock Trading Alert originally published on February 2, 2015, 6:25 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 between 0.8% and 1.5% on Friday, as investors reacted to economic data announcements, quarterly corporate earnings releases. The S&P 500 index is at its support level of 1,990-2,000. On the other hand, level of resistance is at around 2,020-2,025, marked by recent local highs. It still remains within three-month long consolidation, 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 positive, with index futures currently up 0.2%. The main European stock market indexes have been mixed so far. Investors will now wait for some economic data announcements: Personal Income, Personal Spending, PCE Prices - Core number at 8:30 a.m., ISM Index, Construction Spending at 10:00 a.m. The S&P 500 futures contract (CFD) is in an intraday consolidation, following Friday's decline. The nearest important level of support remains at around 1,980-1,985. On the other hand, resistance level is at 1,995-2,000, among others:

S&P500 15-Minute Chart
Larger Image

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it trades along the level of 4,150. The nearest important level of support is at around 4,130, marked by Friday's local low, as the 15-minute chart shows:

NASDAQ100 Futures 15-Minute Chart
Larger Image

Concluding, the broad stock market sold off on Friday, following some uncertainties, ending of the relatively volatile month, among others. It continues to look like a medium-term consolidation following last year's October-November rally, however, the index trades at this consolidation's lower limits. 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.

Thank you.


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