Stock Market Positive Expectations Following Last Week's Sell-off, But Will It Last?

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:

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 1.8-2.1% on Friday, extending their short-term uptrend, as investors continued their post-interest-rate-increase selling. The S&P 500 index got close to support level of 1,990-2,000, as it retraced its recent move up. The nearest important level of resistance is at around 2,040-2,050, marked by previous local lows. For now, it looks like a medium-term consolidation following October rally:

S&P500 Futures Daily Chart

Expectations before the opening of today's trading session are positive, with index futures currently up 0.8-0.9%. The European stock market indexes have gained 0.5-0.9% so far. The S&P 500 futures contract trades within an intraday uptrend, as it retraces some of its Friday's sell-off. The nearest important level of support is at around 1,990-2,000. On the other hand, resistance level is at 2,020-2,030, marked by previous local highs, as the 15-minute chart shows:

S&P500 Futures 15-Minute Chart

The technology Nasdaq 100 futures contract follows a similar path, as it retraces some of Friday's decline. The nearest important level of resistance is at 4,570-4,580, and support level is at 4,500, as we can see on the 15-minute chart:

NASDAQ100 Futures 15-Minute Chart

Concluding, the broad stock market continued its short-term downtrend on Friday, as the S&P 500 index got closer to 2,000 mark. However, it continues to trade within two-month long consolidation so far. 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.

Thank you.

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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