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Paul Rejczak

Paul Rejczak

Writer, Sunshine Profits

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: No Clear Short-Term Direction - Is The Worst Over?

Stock Trading Alert originally published on August 31, 2015, 6:53 AM:


 

Briefly: In our opinion, no speculative positions are justified

Our intraday outlook is 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): bearish
Long-term outlook (next year): bullish

The U.S. stock market indexes were virtually flat on Friday, following their recent rebound, as investors took short-term profits off the table. Our Friday's neutral intraday outlook has proved accurate. The S&P 500 index remains below the level of 2,000. The nearest important level of resistance is at around 1,980-2,000. On the other hand, support level is at 1,940-1,960, marked by recent local highs. There have been no confirmed positive signals so far. For now, it looks like a short-term upward correction following recent sell-off:

S&P500 Futures Daily Chart
Larger Image

Expectations before the opening of today's trading session are negative, with index futures currently down 0.6-0.7%. The European stock market indexes have lost 0.4-0.6% so far. Investors will now wait for the Chicago PMI number release at 9:45 a.m. The S&P 500 futures contract (CFD) trades within an intraday consolidation. The nearest important level of resistance is at around 1,980-1,990, marked by Friday's local highs. On the other hand, support level is at 1,950,1960, as the 15-minute chart shows:

S&P500 Futures 15-Minute Chart
Larger Image

The technology Nasdaq 100 futures contract (CFD) continues to trade along the level of 4,300. The nearest important level of resistance is at 4,330, and support level is at 4,270-4,280, as we can see on the 15-minute chart:

NASDAQ 100 Futures 15-Minute Chart
Larger Image

Concluding, the broad stock market is in a consolidation following recent volatile trading. For now, it looks like a correction within a short-term downtrend. Our late April's short position's (2,098.27, S&P 500 index) profit target has been reached at the level of 1,980. Overall, we gained almost 120 index points on that pre-planned trade. We prefer to be out of the market at this moment, 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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