• 1 day Welcome To The Used Car Bonanza
  • 2 days The Year Of The Retail Investor Keeps Getting Bigger
  • 3 days Airlines Could Recover, But Crew Remain Elusive
  • 3 days Meet The Man Behind The World's Most Exciting Oil Play
  • 5 days Crypto-Mining Immigration Could Be The Start Of A New Trend
  • 6 days Hawkish Fed Sends Gold Prices Crashing
  • 8 days Bezos Is Heading To Space This Sunday
  • 11 days El Salvador’s Surprise Bitcoin Move
  • 14 days Markets Unfazed As Inflation Hits 13-Year High
  • 14 days How the Token Economy is Disrupting Financial Markets
  • 17 days FBI Investigating 100 Types Of Ransomware Attacks
  • 18 days Fed Ends Corporate Credit Emergency Lending Program
  • 21 days AMC Becomes the Latest Winning Meme Stock After GameStop
  • 22 days The Real Reason Your 401k Has Been Lagging
  • 23 days China Lifts Cap On Births, Allows Three Children Per Couple
  • 24 days The Market Is Ripe For Another GameStop Saga
  • 27 days Senate Grills Big Banks Over Pandemic Opportunism
  • 29 days Cannabis Has A Major Cash Problem
  • 29 days Ransomware Netted Criminals $350M In 2020 Alone
  • 31 days Russia Is Taking On Google
Billionaires Are Pushing Art To New Limits

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

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: No Clear Short-Term Direction, Will It Continue Higher?

Stock Trading Alert originally published on August 29,  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 U.S. stock market indexes were mixed between -0.3% and +0.2% on Friday, as investors hesitated following economic data releases, Fed's Janet Yellen's speech at the Jackson Hole Summit. The S&P 500 index remains within a few-week-long consolidation following June - July rally. It is still relatively close to last week's new all-time 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 2,160-2,170, 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 virtually flat. The European stock market indexes have been mixed so far. Investors will now wait for some economic data releases: Personal Income, Personal Spending, Core PCE Prices number at 8:30 a.m. The S&P 500 futures contract trades within an intraday consolidation, as it fluctuates along its Friday's close. The nearest important level of support is at around 2,155-2,160, marked by Friday's local low. On the other hand, resistance level is at 2,180-2,190, 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 trades along the level of 4,780. The nearest important level of resistance is at 4,800-4,820, marked by recent local highs. On the other hand, support level is at 4,750-4,760, as the 15-minute chart shows:

NASDAQ100 Futures 15-Minute Chart
Larger Image

Concluding, the broad stock market extended its short-term consolidation on Friday, as the S&P 500 index fluctuated along the level of 2,170. 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