Stock Market Crash Or Short-Lived Panic?

By: Paul_Rejczak

Briefly: In our opinion, no speculative positions are justified

Our intraday outlook is now neutral, and our short-term outlook is neutral. However, our medium-term outlook is now bearish:

Intraday outlook (next 24 hours): neutral
Short-term outlook (next 1-2 weeks): neutral
Medium-term outlook (next 1-3 months): bearish
Long-term outlook (next year): bullish

The main U.S. stock market indexes lost 3.1-4.3% on Friday, as investors reacted to global stock markets retreat, economic data releases. Our Friday's bearish intraday outlook has proved accurate. The S&P 500 index broke below the level of 2,000 which is a negative medium-term signal. It is the lowest since late October, as it currently trades below half-year long consolidation. Therefore, we change our medium-term outlook from "neutral" to "bearish". We continue to maintain our bullish long-term outlook for now. The nearest important level of resistance is at around 1,980-2,000, marked by previous support level. On the other hand, potential support level is at around 1,900-1,950. There have been no confirmed short-term positive signals so far:

Expectations before the opening of today's trading session are negative, with index futures currently down 1.9-3.5%, following Asian stock markets panic sell-off. The European stock market indexes have lost 2.7-3.0% so far. The S&P 500 futures contract (CFD) trades within an intraday downtrend, as it is closer to the level of 1,900. The nearest important level of resistance is at around 1,930-1,950, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it continues last week's sell-off this morning. The nearest important level of support is at 4,000, and resistance level is at around 4,050-4,100, among others, as we can see on the 15-minute chart:

Concluding, the broad stock market continued its dramatic sell-off on Friday, as the S&P 500 index broke below its technically crucial level of 2,000. Our late April's short position's (2,098.27, S&P 500 index) profit target has been reached at the level of 1,980. Overall, we gained almost 120 index points on that pre-planned trade. As of this morning, we prefer to be out of the market, avoiding low risk/reward ratio trades. We will let you know when we think it is safe to get back in the market.

Paul Rejczak
Stock Trading Strategist
Stock Trading Alerts
SunshineProfits.com

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 behavior based on both traditional and innovative methods of technical analysis. Paul has made his name by developing mechanical trading systems. Paul is the author of Sunshine Profits’ premium service for stock traders: Stock Trading Alerts.

* * * * *

Disclaimer

All essays, research and information found above represent analyses and opinions of Paul Rejczak and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Paul Rejczak and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Rejczak is not a Registered Securities Advisor. By reading Paul Rejczak’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.