• 12 hours COVID Vaccine Distribution Would Be A Big Win For Amazon
  • 3 days Under COVID, The Rich Got Richer
  • 4 days Will Biden Lift Sanctions On Venezuela?
  • 5 days How To Play The Next Stage Of The Marijuana Boom
  • 5 days India Looks To Import More Venezuelan Oil Under Biden
  • 5 days 3 Unstoppable Stocks With A Biden Boost
  • 6 days The Biggest Biotech Story Of 2021?
  • 6 days Biden Looks To Rejoin Paris Climate Agreement
  • 6 days Capital One Fined Again For Money-Laundering Failure
  • 7 days The Star-Studded Fund Backing Clean Energy Startups
  • 8 days The Unexpected Retail Segment On Track To Hit $68B
  • 10 days Oil Demand Falters On New Wave Of Lockdowns
  • 11 days Signal, Telegram Gain Ground As Social Censorship Breaks Headlines
  • 11 days Investors Should Be Worried About Tech Stocks
  • 13 days Battle For Market Share Intensifies In COVID Streaming War
  • 16 days Censorship Is Now Private, And That’s Scary
  • 18 days Markets Hit ‘Ignore’ Over Capitol Coup
  • 20 days Tesla’s China Strategy Is Yet Another ReasonTo Double Down
  • 21 days NYSE Reverses China Company Delisting Plans … For Now
  • 23 days The Dollar Could Remain Weak For Years To Come
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…

Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

Strong U.S. Dollar Weighs On Blue Chip Earnings

Strong U.S. Dollar Weighs On Blue Chip Earnings

Earnings season is well underway,…

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 Index still at 2,000 Mark - Which Direction is Next?

Stock Trading Alert originally published on March 10, 2016, 6:32 AM:


 

Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,050, and profit target at 1,900, S&P 500 index).

Our intraday outlook is bearish, and our short-term outlook is bearish, as we expect a downward correction or short-term uptrend's reversal at some point. Our medium-term outlook remains bearish, as the S&P 500 index extends its lower highs, lower lows sequence. We decided to change our long-term outlook to neutral recently, following a move down below medium-term lows:

Intraday outlook (next 24 hours): bearish
Short-term outlook (next 1-2 weeks): bearish
Medium-term outlook (next 1-3 months): bearish
Long-term outlook (next year): neutral

The U.S. stock market indexes gained 0.2-0.7% on Wednesday, after a relatively volatile trading session, as investors hesitated following recent fluctuations. The S&P 500 index continues to trade close to the level of 2,000. It remains within a short-term consolidation since Friday's better-than-expected Non-Farm Payrolls data release. The nearest important level of resistance is at around 2,000-2,010. The next important level of resistance is at 2,040, marked by the early January daily gap down of 2,038.20-2,043.62. On the other hand, support level is at 1,960-1,980, marked by previous level of resistance. The next important level of support is at 1,950, marked by previous local high. There have been no confirmed negative signals so far. For now, it looks like a downward correction within a month-long uptrend. We still can see some technical overbought conditions:

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 main European stock market indexes have been mixed so far. Investors will now wait for the weekly Initial Claims number release at 8:30 a.m. The S&P 500 futures contract trades within an intraday consolidation, following yesterday's move up. The nearest important level of resistance is at around 1,995, marked by local highs. On the other hand, support level remains at 1,975, marked by Tuesday's daily low, among others, as we can see on the 15-minute chart:

S&P500 Futures 15-Minute Chart
Larger Image

The technology Nasdaq 100 futures contract trades within an intraday consolidation following yesterday's rebound. The nearest important level of resistance is at around 4,300-4,310, and the next level of resistance is at 4,330-4,350, marked by last week's local highs. There have been no confirmed negative signals so far. For now, it looks like a relatively flat consolidation within a month-long uptrend off February low:

NASDAQ 100 Futures 15-Minute Chart
Larger Image

Concluding, the broad stock market rebounded on Wednesday, as the S&P 500 index got close to the level of 2,000 again. Is this just a correction within month-long rebound or a topping pattern before some more meaningful decline? There have been no confirmed short-term  negative signals so far. However, we continue to maintain our speculative short position (opened on Monday at 1,995 - Monday's average opening price of S&P 500 index). We expect a downward correction or uptrend reversal at some point. Stop-loss level is at 2,050, marked by the above-mentioned daily gap down resistance level, and potential profit target is at 1,900 (S&P 500 index). You can trade S&P 500 index using futures contracts (S&P 500 futures contract - SP, E-mini S&P 500 futures contract - ES) or an ETF like the SPDR S&P 500 ETF - SPY. It is always important to set some exit price level in case some events cause the price to move in the unlikely direction. Having safety measures in place helps limit potential losses while letting the gains grow.

Thank you.

 

Back to homepage

Leave a comment

Leave a comment