• 2 hours Russian Central Bank Eyes Gold-Backed Crypto
  • 8 hours Alberta’s Unlikely Alliance With The Nuclear Industry
  • 1 day The True Cost Of Opportunity In America
  • 1 day Why Investors Shouldn't Ignore Gold Stocks
  • 2 days Facebook Scrubs Over 2 Billion Fake Accounts
  • 2 days Dow Scrambles To Avoid Fifth Straight Weekly Loss
  • 3 days Is This The World’s First Truly Democratic Stock Exchange?
  • 3 days India’s Wealthiest Set To Hold $23 Trillion By 2028
  • 3 days First Quarter Profits Slip For World's Top Oil Companies
  • 3 days The Yuan May Be China's Biggest Weakness
  • 4 days Hedge Funds Having A Banner Year
  • 4 days Disney Heiress Asks “Is There Such A Thing As Too Much?”
  • 4 days BHP Turns Bullish On EVs
  • 4 days Investors Turn Bullish On America’s Nuclear Decommissioning Business
  • 5 days The $90M Inflatable Rabbit Redefining Modern Art
  • 5 days Huawei’s Fate In The Air
  • 5 days Tesla Slashes Prices Again
  • 5 days The Modern History Of Financial Entropy
  • 6 days Italy’s Central Bank Embraces Sustainable Investing
  • 6 days Trump Lifts Metals Tariffs To Cool Simmering Trade War
Strong U.S. Dollar Weighs On Blue Chip Earnings

Strong U.S. Dollar Weighs On Blue Chip Earnings

Earnings season is well underway,…

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: SP500 Above 1,900 Mark Again, New Uptrend or Just a Bounce?

Stock Trading Alert originally published on January 25, 2016, 6:37 AM:


 

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

Our intraday outlook is neutral, and our short-term outlook is neutral. Our medium-term outlook remains bearish, as the S&P 500 index extends its lower highs, lower lows sequence. However, we decided to change our long-term outlook to neutral recently, following recent move down below medium-term lows:

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): neutral

The U.S. stock market indexes gained between 1.3% an 2.8% on Friday, retracing some of their recent move down, as investors reacted to oil prices rally, economic data releases. The S&P 500 index extended its Thursday's move up and managed to close above the level of 1,900. The nearest important level of resistance is at around 1,950-1,960, marked by recent local highs. On the other hand, support level remains at 1,850-1,880. For now, it looks like an upward correction within a short-term downtrend. There have been no confirmed positive signals so far. Quarterly corporate earnings releases may drive stocks higher, however, we will probably see more short-term volatility:

S&P500 Futures Daily Chart
Larger Image

Expectations before the opening of today's trading session are slightly negative, with index futures currently down 0.2-0.3%. The main European stock market indexes have been mixed so far. The S&P 500 futures contract trades within an intraday consolidation, following last week's hefty rebound. The nearest important level of resistance is at around 1,900-1,905. On the other hand, support level is at 1,880-1,885, marked by some Friday's local lows. The market retraces a part of its recent decline. For now, it looks like a correction within a downtrend. However, there have been no confirmed short-term negative signals so far:

S&P500 Futures 15-Minute Chart
Larger Image

The technology Nasdaq 100 futures contract follows a similar path, as it currently trades above the level of 4,200. It is worthwhile to mention that it traded below the level of 4,000 on Wednesday. The nearest important level of support is at around 4,200. The resistance level is at 4,250-4,270, marked by previous intraday local highs. Is this a downtrend reversal or just a quick "oversold" rebound before another leg down? For now, it looks like a correction within a short-term downtrend. However, we continue to see some clearly bullish action here:

NASDAQ100 Futures 15-Minute Chart
Larger Image

Concluding, the broad stock market extended its short-term rebound on Friday, as the S&P 500 index broke above the level of 1,900. Is this a new uptrend or just an upward correction before another leg down? For now, it looks like a "V" type bottom, but we will probably see more short-term volatility ahead. The index may trade along its last year's August - September local lows for some time, as it continues to act as a medium-term level of support. Our speculative long position (1,891.68, S&P 500 index) has been closed at the stop-loss level of 1,840 (S&P 500 index) on Wednesday, as the futures contract broke slightly below the level of 1,835 ahead of the cash market's opening (it currently trades around 5 points lower than the cash market). 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