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Paul Rejczak

Paul Rejczak

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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: More Optimism Ahead Of Fed's Rate Decision Release

Stock Trading Alert originally published on September 17, 2015, 6:54 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 main U.S. stock market indexes gained between 0.5% and 0.9% on Wednesday, as investors awaited today's FOMC Rate Decision announcement. The S&P 500 index retraced some of its late August sell-off, however, it remains below the level of 2,000. The nearest important level of resistance is at 1,980--2,000. On the other hand, support level is at 1,950, and the next support level is at 1,900-1,920. There have been no confirmed positive signals so far. It still looks like an upward correction within a downtrend:

S&P500 Futures Daily Chart
Larger Image

Expectations before the opening of today's trading session are slightly negative, with index futures currently down 0.1-0.2%. The European stock market indexes have been mixed so far. Investors will now wait for some economic data announcements: Initial Claims, Housing Starts, Building Permits at 8:30 a.m., Philadelphia Fed number at 10:00 a.m., FOMC Rate Decision release at 2:00 p.m. The S&P 500 futures contract (CFD) trades within an intraday consolidation following recent move up. The nearest important level of resistance is at 1,990-2,000, and support level is at 1,970-1,980, as the 15-minute chart shows:

S&P500 Futures 15-Minute Chart
Larger Image

The technology Nasdaq 100 futures contract (CFD) trades within a similar intraday consolidation. The nearest important resistance level is at 4,380-4,400, and support level is at 4,350, among others, as we can see on the 15-minute chart:

NASDAQ100 Futures 15-Minute Chart
Larger Image

Concluding, the broad stock market remains within a short-term uptrend following late August sell-off. However, there have been no confirmed positive signals so far. It looks like an upward correction within a medium-term downtrend. We 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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