• 1 hour The Shroom Boom Is Here To Stay
  • 1 day Biden Will Be A Boon For Solar Stocks
  • 3 days The Gold Rally Has Finally Run Out Of Steam
  • 3 days Citibank Analyst Predicts $300k Bitcoin By End Of 2021
  • 6 days Bitcoin Lives Up To Its Safe Haven Status In A Big Way
  • 6 days 14 Million People Will Lose Unemployment Benefits On December 31st
  • 8 days Why 12 Million American Millionaires Isn’t Good News
  • 9 days Big Oil Is Paying The Price For Investing In Renewables
  • 10 days The Banking Industry’s $35 Billion Gravy Train Could Disappear
  • 11 days Did Amazon Just Democratize Prescription Drugs?
  • 12 days The Private Space Race Just Got Very Real
  • 14 days Short Sellers Are Willing Big In This Turbulent Market
  • 15 days SpaceX Gets Go-Ahead To Send Humans Into Space
  • 16 days Saudi Arabia Lost $27 Billion In Oil Crash
  • 17 days China’s Big Tech Takes A Hit As Regulators Crack Down
  • 18 days Black Friday Could Be Retailers’ Only Hope
  • 19 days Why You Should Not Dump Your Stay At Home Stocks Just Yet
  • 20 days The Real Reason Why Uber And Lyft Stocks Have Soared Nearly 50%
  • 22 days Bitcoin Heads Towards $16,000 And No One’s Cashing In
  • 23 days Elon Musk’s $250 Tesla Tequila Is Already Sold Out
What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

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