• 4 hours The $90M Inflatable Rabbit Redefining Modern Art
  • 7 hours Huawei’s Fate In The Air
  • 10 hours Tesla Slashes Prices Again
  • 12 hours The Modern History Of Financial Entropy
  • 1 day Italy’s Central Bank Embraces Sustainable Investing
  • 1 day Trump Lifts Metals Tariffs To Cool Simmering Trade War
  • 1 day Researchers Push To Limit Space Mining
  • 1 day Could China Start Dumping U.S. Treasury Bonds?
  • 2 days Is Winter Coming For HBO?
  • 2 days Rise Of EVs Signals Peak Gasoline
  • 3 days Jeff Bezos Doubles Down On Space Colonization Ambitions
  • 3 days Gold Mining Stocks Stuck In Limbo
  • 4 days Executive Order Targets Huawei Over Espionage
  • 4 days Why Now May Be The Best Time Ever To Hold Gold
  • 5 days Fake News Sinks Shares In UK-Based Bank
  • 5 days De Beers To Build $468 Million Diamond Recovery Ship
  • 5 days Moody's: Turkey Faces Possible Credit Downgrade
  • 5 days Tesla's Solar Sales Are Slipping
  • 6 days Auto Industry To Get Temporary Tariff Relief
  • 6 days Welcome To The World’s Biggest Free Trade Area
Strong U.S. Dollar Weighs On Blue Chip Earnings

Strong U.S. Dollar Weighs On Blue Chip Earnings

Earnings season is well underway,…

Market Sentiment At Its Lowest In 10 Months

Market Sentiment At Its Lowest In 10 Months

Stocks sold off last week…

How Millennials Are Reshaping Real Estate

How Millennials Are Reshaping Real Estate

The real estate market is…

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…

Contact Author

  1. Home
  2. Markets
  3. Other

Stock Trading Alert: Negative Expectations Again, Following Asian Markets' Rout

Stock Trading Alert originally published on January 7, 2016, 6:25 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 U.S. stock market indexes lost 0.9-1.5% on Wednesday, extending their recent move down, as investors reacted to economic data releases, oil prices decline. The S&P 500 index broke below 2,000 mark. The nearest important level of support is at 1,990-2,000, and the next potential support level is at around 1,950, marked by early October daily gap up, among others. On the other hand, level of resistance is at 2,000 mark, and the next important resistance level is at around 2,040, marked by Monday's daily gap down of 2,038.20-2,043.62. There have been no confirmed positive signals so far. However, we can see some short-term oversold conditions which may lead to an upward correction at some point:

S&P500 Futures Daily Chart
Larger Image

Expectations before the opening of today's trading session are very negative, with index futures currently down 2.2-3.0%, as investors react to Chinese stock market, oil prices sell-off. The main European stock market indexes have lost 2.7-3.3% so far. Investors will now wait for the Initial Claims number release at 8:30 a.m. The S&P 500 futures contract trades within a sharp intraday downtrend, as it extends its recent sell-off. The nearest important level of resistance is at around 1,950-1,970, marked by previous local lows. On the other hand, potential support level is at 1,910-1,930, marked by some last year's local highs. There have been no confirmed positive signals so far. However, we can see short-term oversold conditions:

S&P500 Futures 15-Minute Chart
Larger Image

The technology Nasdaq 100 futures contract follows a similar path, as it accelerates its short-term downtrend. It currently trades close to 4,300 mark. The nearest important level of resistance is at around 4,350-4,400. There have been no confirmed short-term positive signals so far. The market broke below yesterday's intraday consolidation, as we can see on the 15-minute chart:

NASDAQ 100 Futures 15-Minute Chart
Larger Image

Concluding, the broad stock market is expected to open much lower today, as the index futures are down more than 2% right now. However, we can see some short-term technical oversold conditions. Therefore, we decided to close our profitable speculative short position (2,077.34, S&P 500 index) at the opening of today's cash market trading session. As of this morning, 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.

 

Back to homepage

Leave a comment

Leave a comment