Briefly:
Intraday trade: The S&P 500 index may slightly extend its short-term advance today. However, we can see some technical overbought conditions that may lead to a downward correction. Therefore, we prefer to be out of the market again, avoiding low risk/reward ratio trades.
Our intraday outlook remains neutral, and our short-term outlook is bearish, as we expect downward correction. Our medium-term outlook remains bearish:
Intraday outlook (next 24 hours): neutral
Short-term outlook (next 1-2 weeks): bearish
Medium-term outlook (next 1-3 months): bearish
The U.S. stock market indexes gained between 0.1% and 1.1% on Wednesday, extending their short-term uptrend following better-than-expected economic data releases, among others. The S&P 500 index broke above its short-term consolidation along the level of 2,440-2,450. It is currently trading just 1.3% below the August 8 all-time high of 2,490.87. The Dow Jones Industrial Average was relatively weaker than the broad stock market, as it gained 0.1%, and technology Nasdaq Composite gained 1.1%. The nearest important level of resistance of the S&P 500 index is now at 2,465-2,475, marked by previous support level and local highs. The next resistance level is at 2,490-2,500, marked by the above-mentioned all-time high. On the other hand, support level is at 2,440-2,450, marked by previous level of resistance. The next support level is at 2.430-2,435, marked by last Tuesday’s daily gap up and Wednesday’s daily low. The support level is also at 2,400-2,420. The market has retraced most of its recent downtrend, as it broke above 2,450 mark. Will uptrend continue? Or is this just an upward move within a consolidation? The S&P 500 index continues to trade within a medium-term consolidation following early June breakout above 2,400 mark, as we can see on the daily chart:
Will Uptrend Continue?
Expectations before the opening of today’s trading session are positive, with index futures currently up between 0.2% and 0.3% vs. yesterday’s closing prices. The European stock market indexes have gained 0.6-0.7% so far. Investors will now wait for some economic data announcements: Initial Claims, Personal Income, Personal Spending at 8:30 a.m., Chicago PMI at 9:45 a.m., Pending Home Sales at 10:00 a.m. The market expects that the Initial Claims number was at 237,000 last week, Personal Income grew 0.3%, and Personal Spending grew 0.4% in July. The market also expects that Chicago PMI was at 58.7 in August. The S&P 500 futures contract trades within an intraday consolidation following an overnight move up. The market extends its short-term uptrend following Tuesday’s intraday bounce after a lower opening. The nearest important level of resistance is at around 2,470-2,475, marked by some previous local highs. The next resistance level is at 2,480-2,490, marked by record high. On the other hand, the nearest important level of support is at around 2,450-2,455, marked by recent resistance level. The next support level is at 2,440-2,445, marked by yesterday’s local low. Will uptrend continue? There have been no confirmed short-term negative signals so far. However, we can see some technical overbought conditions. The futures contract broke above its recent consolidation, as the 15-minute chart shows:
