• 6 hours Silver Steadies Following Wild Week In Precious Metals Markets
  • 22 hours $5 Million Gold Toilet Vanishes
  • 22 hours Gold On The Rise After Fed Rate Cut
  • 1 day Oil Trader Loses $320 Million On Derivative Bets
  • 2 days S&P 500 Officially In An Earnings Recession
  • 2 days Miners Are Weathering The Trade War Storm
  • 2 days UK Credit Card Interest Rates Are Skyrocketing
  • 3 days From Frenzy To Flop, The Death Of This Year’s Most Hyped IPO
  • 3 days Are Smart TVs Spying On Us?
  • 3 days Is Fossil Fuel Divestment A Waste Of Time?
  • 4 days A Russian Billionaire’s Space Quest To Save Humanity
  • 4 days Markets Take Breather As Consolidation Continues
  • 4 days Economic Woes Weigh On Copper Prices
  • 4 days World's Largest IPO At Risk Following Drone Strikes
  • 5 days Gold Is Beating Buffett’s Berkshire Hathaway
  • 5 days What’s Behind The Silver Sell-Off?
  • 5 days The Retail Apocalypse Is Accelerating
  • 5 days The Top Tech Stocks Of The Year
  • 6 days America’s Workforce Elderly Workforce To Double By 2028
  • 6 days Toyota Tests Solar-Powered Prius
Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

Billionaires Are Pushing Art To New Limits

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

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: Stocks Remain Close To New Record Highs, Will They Continue Higher?

Stock Trading Alert originally published on August 15,  2016, 6:53 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 main U.S. stock market indexes were mixed between -0.2% and +0.1% on Friday, extending their short-term uncertainty, as investors reacted to some mixed economic data announcements. The S&P 500 index continues to trade close to its last Thursday's all-time high of 2,188.45. The nearest important level of support is at around 2,170, marked by short-term local lows. The next support level  remains at 2,150. On the other hand, resistance level is at around 2,190, marked by all-time high. The next potential resistance level is at 2,200. Will the market continue higher? Or is this some kind of a topping pattern before downward reversal? There have been no confirmed negative signals so far:

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%. The main European stock market indexes have gained 0.1-0.4% so far. Investors will now wait for some important economic data announcements: Empire Manufacturing number, NAHB Housing Market Index at 8:30 a.m. The S&P 500 futures contract trades within an intraday uptrend, as it extends its Friday's move up. The nearest important level of resistance is at around 2,185, marked by short-term local high. On the other hand, support level remains at 2,170-2,175, 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 follows a similar path, as it currently trades close to new all-time high. The nearest important level of support is at around 4,790-4,800. There have been no confirmed negative signals so far. However, we can see overbought conditions accompanied by negative technical divergences:

NASDAQ 100 Futures 15-Minute Chart
Larger Image

Concluding, the broad stock market remains within a short-term uptrend, as the S&P 500 index trades close to new all-time high. We still can see technical overbought conditions accompanied by bearish 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