• 3 hours Facebook Scrubs Over 2 Billion Fake Accounts
  • 9 hours Dow Scrambles To Avoid Fifth Straight Weekly Loss
  • 1 day Is This The World’s First Truly Democratic Stock Exchange?
  • 1 day India’s Wealthiest Set To Hold $23 Trillion By 2028
  • 1 day First Quarter Profits Slip For World's Top Oil Companies
  • 1 day The Yuan May Be China's Biggest Weakness
  • 2 days Hedge Funds Having A Banner Year
  • 2 days Disney Heiress Asks “Is There Such A Thing As Too Much?”
  • 2 days BHP Turns Bullish On EVs
  • 2 days Investors Turn Bullish On America’s Nuclear Decommissioning Business
  • 3 days The $90M Inflatable Rabbit Redefining Modern Art
  • 3 days Huawei’s Fate In The Air
  • 3 days Tesla Slashes Prices Again
  • 3 days The Modern History Of Financial Entropy
  • 4 days Italy’s Central Bank Embraces Sustainable Investing
  • 4 days Trump Lifts Metals Tariffs To Cool Simmering Trade War
  • 4 days Researchers Push To Limit Space Mining
  • 4 days Could China Start Dumping U.S. Treasury Bonds?
  • 5 days Is Winter Coming For HBO?
  • 5 days Rise Of EVs Signals Peak Gasoline
Strong U.S. Dollar Weighs On Blue Chip Earnings

Strong U.S. Dollar Weighs On Blue Chip Earnings

Earnings season is well underway,…

Market Sentiment At Its Lowest In 10 Months

Market Sentiment At Its Lowest In 10 Months

Stocks sold off last week…

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 Record Highs

Stock Trading Alert originally published on August 1, 2016, 6:58 AM:


 

Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,210, and profit target at 2,050, S&P 500 index).

Our intraday outlook is bearish, and our short-term outlook is bearish. Our medium-term outlook is now neutral, following S&P 500 index breakout above last year's all-time high:

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

The U.S. stock market indexes were mixed between -0.1% and +0.2% on Friday, extending their short-term fluctuations, as investors reacted to economic data announcements. The S&P 500 index has managed to reach yet another new all-time high at the level of 2,177.09. The nearest important level of resistance remains at 2,175-2,180, and the next potential resistance level is at 2,200. On the other hand, support level is at around 2,150-2,155, marked by short-term local lows. The next important support level is at 2,130-2,135, marked by previous level of resistance. There have been no confirmed negative signals so far. However, we can see some short-term overbought conditions accompanied by negative technical divergences:

S&P500 Futures Daily Chart
Larger Image

Expectations before the opening of today's trading session are virtually flat, following an overnight move higher. The main European stock market indexes have been mixed so far. Investors will now wait for some economic data announcements: Construction Spending, ISM Index at 10:00 a.m. The S&P 500 futures contract trades within an intraday consolidation, as it fluctuates along the level of 2,170. The nearest important level of resistance is at around 2,175-2,180. On the other hand, support level is at 2,150-2,160, among others, as we can see on the 15-minute chart:

S&P500 Futures Hourly Chart
Larger Image

The technology Nasdaq 100 futures contract follows a similar path, as it currently trades along its new all-time high. The nearest important level of resistance is at around 2,740, and support level is at 4,700, among others. There have been no confirmed negative signals so far. However, we can see some short-term technical overbought conditions:

NASDAQ100 Futures 15-Minute Chart
Larger Image

Concluding, the broad stock market trades along its record highs, as the S&P 500 index gets closer to 2,200 mark.  We still can see short-term overbought conditions accompanied by bearish technical divergences. Therefore, we continue to maintain our speculative short position (opened on July 18th at 2,162, S&P 500 index). Stop-loss level is at 2,210 and potential profit target is at 2,050 (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