"No warning can save people determined to grow suddently rich" - Lord Overstone

  • 6 hours The FANG Stock Investors Should Avoid
  • 1 day Is This The Death Of The iPhone X?
  • 1 day Is London Still The Financial Capital Of The World?
  • 1 day Is Gold Staging A Comeback?
  • 1 day The $200 Million ‘Golden Parachute’ For Rupert Murdoch
  • 1 day Bitcoin’s Breakout Is Not As Bullish As it Seems
  • 1 day Farmers On Edge As Trade War Hits U.S. Grain Shipments
  • 2 days Is Silver Poised For A Massive Break Out?
  • 2 days Meet The Hedge Fund Billionaires Club
  • 2 days The Next Housing Crisis Could Be Right Around The Corner
  • 2 days Cartel's, Pirates And Corruption Cost Mexico $1.6 Billion Per Year
  • 2 days Africa’s Fastest Growing Economy
  • 2 days The Blockchain Boom Hits The Utilities Sector
  • 2 days Why Smart Money Is Selling Off Right Before The Bell
  • 3 days Tech Giants Rally Ahead Of Earnings Reports
  • 3 days Global Debt Hits 225% Of GDP
  • 3 days The World’s First Trillionaire Will Be A Space Miner
  • 3 days How Student Debt Could Cause The Next Real Estate Crisis
  • 3 days This $550 Billion Industry Is Betting On Bitcoin
  • 3 days One Commodity Set To Soar On Russian Sanctions
Investors Bullish As Earnings Season Kicks Off

Investors Bullish As Earnings Season Kicks Off

The first round of earnings…

Oligarch Risk: The New Red Flag For Investors

Oligarch Risk: The New Red Flag For Investors

Investors are scrambling to diversify…

Tech Giants Rally Ahead Of Earnings Reports

Tech Giants Rally Ahead Of Earnings Reports

Earning season has just begun,…

Paul Rejczak

Paul Rejczak

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…

More Info

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