• 22 hours Trump Was Right About The Dollar
  • 1 day Is Silver Gearing Up For A Rally?
  • 1 day World’s Largest Hedge Fund Turns Bullish On Gold
  • 1 day It’s Time To Spend More On Clean Energy R&D
  • 2 days Contrarian Investors Are Beating The Stock Market
  • 2 days Bulgaria’s Revenue Agency Falls Victim To Biggest Cyber Heist In History
  • 2 days Amazon Faces European Union Anti-Trust Probe
  • 2 days Commodities Are Having A Stellar Year
  • 3 days Bezos’ Next Big Project Could Be Worth $100 Billion Per Year
  • 3 days 3,600 Years Later, Climate Change Turns Mammoths Into $40M Market
  • 3 days Tesla, Apple Claim China Is Stealing Intellectual Property
  • 3 days EV Giants Duke It Out For Battery Dominance
  • 4 days Tech Billionaire Takes Aim At Google
  • 4 days Chinese Police Bust Largest Ever Illicit Crypto Mining Operation
  • 4 days Expect A Pullback Before Gold's Next Major Rally
  • 4 days Why Interest On Gold Matters
  • 5 days Ten Extravagant Food Items For The Wealthy Only
  • 5 days Why Saudi Arabia Won't Give Up On The Aramco IPO
  • 6 days $32 Million Crypto Heist Halts Tokyo Exchange
  • 6 days Is A Gold Selloff Looming?
The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

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: Stocks Remain Close To Record Highs - Top Or Just Pause Before Another Leg Up?

Stock Trading Alert originally published on August 22,  2016, 6:50 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 lost 0.1-0.2% on Friday, extending their short-term uncertainty, as investors continued to hesitate following June - July rally. The S&P 500 index remains close to its last Monday's new record high of 2,193.81. The nearest important level of resistance is at around 2,190-2,200. On the other hand, support level is at 2,165-2,170, marked by short-term local lows. The next support level  remains at 2,150. 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 slightly negative, with index futures currently down 0.2%. The European stock market indexes have lost 0.2-0.5% so far. The S&P 500 futures contract trades within an intraday consolidation, as it fluctuates along the level of 2,180. The nearest important level of resistance is at around 2,185-2,190, marked by local highs. On the other hand, support level remains at 2,165-2,170, 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 the level of 4,800. The nearest important level of resistance is at around 4,810-4,820, and support level remains at 4,770-4,780, as the 15-minute chart shows:

NASDAQ100 Futures 15-Minute Chart
Larger Image

Concluding, the broad stock market remains within a short term consolidation, as the S&P 500 index trades along its new record high. We still can see overbought conditions accompanied by negative 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