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

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

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: More Short-Term Uncertainty As Stocks Hover Along Last Year's Medium-Term Highs

Stock Trading Alert originally published on May 12, 2016, 6:56 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:

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 lost 0.9-1.2% on Wednesday, retracing their Tuesday's move up, as investors continued to hesitate. The S&P 500 index extends its consolidation following February - April rally. The nearest important level of support is at around 2,050, and the next support level is at 2,030-2,040, marked by previous local lows. On the other hand, resistance level is at 2,080-2,085, marked by recent local highs. The next important level of resistance remains at 2,100-2,110, marked by late April highs. Last year's highs along the level of 2,100 continue to act as medium-term resistance level. Will the market break above these highs and continue its seven-year long bull market?

S&P500 Futures Daily Chart
Larger Image

Expectations before the opening of today's trading session are positive, with index futures currently up 0.5-0.6%. The European stock market indexes have gained 0.4-0.8% 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 an intraday uptrend, as it retraces some of its yesterday's decline. The nearest important level of resistance is at around 2,080. On the other hand, support level remains at 2,055-2,060, marked by recent fluctuations. For now, it looks like a downward correction within a short-term uptrend, as we can see on the 15-minute chart:

S&P500 Futures 15-Minute Chart
Larger Image

The technology Nasdaq 100 futures contract follows a similar path, as it retraces its yesterday's move down, following a rebound off support level at around 4,350. The nearest important level of resistance is at 4,400 marked by yesterday's local high, among others. The market trades within a consolidation following short-term uptrend, as the 15-minute chart shows:

NASDAQ100 Futures 15-Minute Chart
Larger Image

Concluding, the broad stock market extended its short-term consolidation yesterday, as the S&P 500 index retraced Tuesday's rally. However, there have been no confirmed negative signals so far. The index remains relatively close to last year's medium-term highs along the level of 2,100 and continues to trade above its late March - early April local lows. It still looks like a correction within a medium-term uptrend, so 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