Stock Market New Downtrend Or Just Another Pull-Back? No Clear Direction So Far

By: Paul_Rejczak

Briefly: In our opinion, no speculative positions are justified.

Our intraday outlook is neutral, and our short-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
Long-term outlook (next year): bullish

The U.S. stock market indexes lost between 1.1% and 1.6% on Friday, retracing their recent move up, as investors reacted to economic data announcements, quarterly corporate earnings releases. The S&P 500 index bounced off its resistance level at 2,100-2,120, marked by February 25 all-time high of 2,119.59, among others. On the other hand, the nearest important level of support remains at around 2,070, marked by local lows. There is no clear medium-term direction, as we can see on the daily chart:

Expectations before the opening of today's trading session are positive, with index futures currently up 0.4-0.5%. The main European stock market indexes have gained 0.7-1.3% so far. Investors will now wait for further quarterly corporate earnings releases. The S&P 500 futures contract (CFD) trades within an intraday uptrend, as it retraces some of its Friday's selloff. The nearest important level of resistance is at 2,090-2,100, and support level is at 2,075-2,080, among others:

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it retraces some of its Friday's move down. The nearest important level of support remains at 4,350, and resistance level is at 4,380-4,440, as the 15-minute chart shows:

Concluding, the broad stock market bounced off its medium-term resistance level on Friday. However, the expectations before the opening of today's trading session are positive. For now, it looks like further medium-term consolidation, following last year's October-November rally. We still 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.

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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.

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