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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: Stocks Fluctuate As Fed Leaves Interest Rate Unchanged Again, Which Direction Is Next?

Stock Trading Alert originally published on June 18, 2015, 6:15 AM:


Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,140, and profit target at 1,980, S&P 500 index)

Our intraday outlook is bearish, and our short-term outlook is bearish:

Intraday outlook (next 24 hours): bearish
Short-term outlook (next 1-2 weeks): bearish
Medium-term outlook (next 1-3 months): neutral
Long-term outlook (next year): bullish

The main U.S. stock market indexes gained 0.2-0.3% on Wednesday, following FOMC Rate Decision release. The S&P 500 index extended its short-term fluctuations along the level of 2,100. The nearest important level of resistance is at around 2,100, and the next resistance level is at 2,115, marked by previous local high. On the other hand, level of support remains at 2,070-2,080. There have been no confirmed negative signals so far. However, we still can see negative technical divergences:

S&P500 Daily Chart
Larger Image

Expectations before the opening of today's trading session are positive, with index futures currently up 0.2%. The European stock market indexes have lost 0.3-1.2% so far. Investors will now wait for some economic data announcements: Initial Claims, Consumer Price Index at 8:30 a.m., Philadelphia Fed, Leading Indicators at 10:00 a.m. The S&P 500 futures contract (CFD) trades within an intraday uptrend, following yesterday's fluctuations. The nearest important level of resistance is at around 2,105-2,110, and support level remains at 2,085-2,090, as the 15-minute chart shows:

S&P500 15-Minute Chart
Larger Image

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it extends its short-term fluctuations. The nearest important level of resistance is at 4,480, and support level is at 4,440-4,450, among others, as we can see on the 15-minute chart:

NASDAQ 100 Futures 15-Minute Chart
Larger Image

Concluding, the broad stock market fluctuated following recent move up, as investors reacted to FOMC Rate Decision release yesterday. We continue to maintain our speculative short position (2,098.27, S&P 500 index), as we expect a downward correction or an uptrend reversal. Stop-loss is at 2,140, and potential profit target is at 1,980. You can trade S&P 500 index using futures contracts (S&P 500 futures contract - SP, E-mini S&P 500 futures contract - ES) or an ETF like the SPDR S&P 500 ETF - SPY. 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.

Thank you.


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