Intraday trade: Our Friday’s intraday trading outlook was bearish. It proved accurate because the S&P 500 reached our intraday profit target level of 2,615 (daily low at 2,605.52). the index fell sharply following relatively neutral opening of the trading session. The market has managed to close neutral (-0.2%). We still can see some short-term technical overbought conditions. However, there have been no confirmed negative signals so far. Therefore, we prefer to be out of the market today, avoiding low risk/reward ratio trades.
Our intraday outlook is neutral today. Our short-term outlook is neutral, and our medium-term outlook is neutral:
Intraday outlook (next 24 hours): neutral
Short-term outlook (next 1-2 weeks): neutral
Medium-term outlook (next 1-3 months): neutral
The main U.S. stock market indexes lost between 0.2% and 0.4% on Friday, following volatile trading session, as investors took short-term profits off the table. The S&P 500 index retraced most of its last week’s rally, as it got close to 2,600 mark, before sharply bouncing off that support level and closing relatively neutral vs. Thursday’s closing price. The index trades around 0.6% below its Thursday’s new record high of 2,657.74. The Dow Jones Industrial Average remains relatively stronger than the broad stock market after last week’s Tuesday-Thursday’s rally to new all-time high at the level of 24,327.82. It retraced some of this move up on Friday, before closing just 0.4% below Thursday’s record high. The technology Nasdaq Composite was relatively weak, as it lost 0.4% following intraday move down below the level of 6,750. The nearest important level of support of the S&P 500 index is at around 2,630-2,635, marked by some recent local highs. The next support level remains at 2,600-2,610, marked by Friday’s local low. The support level is also at at 2,590, marked by last Tuesday’s daily gap up of 2,584.64-2,589.17. On the other hand, resistance level is at around 2,650-2,660, marked by all-time high. Will the S&P 500 index continue its uptrend following Friday’s fluctuations? Or is this some topping pattern before medium-term downward correction? There have been no confirmed negative signals so far. However, we still can see medium-term technical overbought conditions along with negative technical divergences:
