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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: Negative Expectations Following Failed Greece Debt Crisis Talks

Stock Trading Alert originally published on June 29, 2015, 6:57 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 were mixed between -0.7% and +0.3% on Friday, as investors remained uncertain ahead of news concerning Greece debt crisis. The S&P 500 index trades within a short-term downtrend. The nearest important level of resistance is at around 2,115, marked by local highs. On the other hand, support level is at 2,070-2,080, among others. There have been no confirmed negative signals so far. However, we can see negative technical divergences:

S&P500 Daily Chart
Larger Image

Expectations before the opening of today's trading session are negative, with index futures currently down 1.0-1.3%. The European stock market indexes have lost 1.6-3.5% so far. Investors will now wait for the Pending Home Sales number release at 10:00 a.m. The S&P 500 futures contract (CFD) is within an intraday uptrend, following gap-down opening. The nearest important level of support is at 2,050-2,060, and resistance level is at 2,080-2,090, marked by Friday's local lows, as the 15-minute chart shows:

S&P500 15-Minute Chart
Larger Image

The technology Nasdaq 100 futures contract (CFD) followed a similar path, as it traded as low as 4,400 following weekend news concerning Greece debt crisis. The nearest important support level is at 4,400, and resistance level is at 4,440-4,460, marked by gap-down opening, as we can see on the 15-minute chart:

NASDAQ100 Futures 15-Minute Chart
Larger Image

Concluding, the broad stock market slightly extended its short-term downtrend on Friday and it is bound to continue its decline today. We 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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