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Paul Rejczak

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Stock Trading Alert: Positive Expectations Following Interest Rate Decision

Stock Trading Alert originally published on December 17, 2015, 6:39 AM:


 

Briefly: In our opinion, no speculative positions are justified.

Our intraday outlook is now 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 1.3-1.5% on Wednesday, as investors reacted to the FOMC's Rate Decision announcement. The S&P 500 index extended its short-term uptrend, retracing more of its recent move down. The nearest important level of resistance is at around 2,080-2,100. On the other hand, support level remains at 2,000-2,020, among others. For now, it looks like a consolidation following October rally:

S&P500 Futures Daily Chart
Larger Image

Expectations before the opening of today's trading session are positive, with index futures currently up 0.2-0.3%. The European stock market indexes have gained 1.4-3.0% so far. Investors will now wait for some economic data announcements: Initial Claims, Philadelphia Fed number at 8:30 a.m. The S&P 500 futures contract trades within an intraday uptrend, as it continues its yesterday's move up. The nearest important level of resistance is at around 2,080. On the other hand, support level remains at 2,050, among others, as the 15-minute chart shows:

S&P500 Futures 15-Minute Chart
Larger Image

The technology Nasdaq 100 futures contract follows a similar path, as it continues yesterday's advance. The nearest important level of resistance is at 4,700, and support level is at 4,650, as we can see on the 15-minute chart:

NASDAQ100 Futures 15-Minute Chart
Larger Image

Concluding, the broad stock market reacted positively to yesterday's FOMC Interest Rate Decision release. However, it continues to trade within medium-term consolidation. Our short position (2,088.35, S&P 500 index) has been closed at the stop-loss (profit taking) level of 2,060 - S&P 500 index. Overall, we gained almost 30 index points on that one-and-a-half month long trade. 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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