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Paul Rejczak

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Stock Trading Alert: Will Stock Market Shrug Off Greek Fears?

Stock Trading Alert originally published on July 6, 2015, 6:27 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 -0.2% and +0.1% on Thursday, extending their short-term fluctuations, as investors hesitated following recent move down. The S&P 500 index remains below the level of 2,100. The nearest important level of support is at around 2,040-2,050, marked by March local lows. On the other hand, resistance level is at 2,090-2,100, among others:

S&P500 Futures Daily Chart
Larger Image

Expectations before the opening of today's trading session are negative, with index futures currently down 0.5%. The European stock market indexes have lost 0.5-1.2% so far. Investors will now wait for the ISM Service number release at 10:00 a.m. The S&P 500 futures contract (CFD) trades within an intraday uptrend, following lower opening. The nearest important level of support remains at 2,030-2,040, and resistance level is at 2,065-2,070, marked by Friday's consolidation, as the 15-minute chart shows:

S&P500 Futures 15-Minute Chart
Larger Image

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it trades along the level of 4,400. The nearest important resistance level is at 4,400-4,420, and support level is at around 4,350, as we can see on the 15-minute chart:

NASDAQ 100 Futures 15-Minute Chart
Larger Image

Concluding, the broad stock market continued to fluctuate on Thursday, along its short-term local highs, as investors awaited Greece debt crisis news releases. For now, it looks like a correction within two-week-long downtrend. Therefore, we continue to maintain our already profitable speculative short position (2,098.27, S&P 500 index), as we expect a medium-term 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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