Stocks Fluctuate Following Recent Move Up – Will Uptrend Extend Even Further?

Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,085 and profit target at 1,950, S&P 500 index).

Our intraday outlook is bearish, and our short-term outlook is bearish:

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

The main U.S. stock market indexes gained between 0.1% and 0.7% on Wednesday, extending their short-term consolidation, as investors continued to hesitate ahead of a long holiday weekend. The S&P 500 index remains close to Tuesday’s all-time high of 2,074.21, as it moves along the level of 2,070. Possible resistance level is at around 2,085-2,100. On the other hand, the nearest important level of support is at 2,060-2,065, marked by recent local lows, and the next support level is at around 2,050-2,055, marked by November 21st daily gap up of 2,053.8-2,056.8, among others. There have been no confirmed negative signals so far, however, we can see overbought conditions accompanied by negative technical divergences:

Expectations before the opening of today’s trading session are mixed, with index futures currently between -0.2% and +0.2%. The European stock market indexes have lost 0.4-0.7% so far. The S&P 500 futures contract (CFD) retraced some of this week’s move up, as it bounced off resistance level at around 2,070-2,075. The nearest important level of support is at around 2,060-2,065, marked by recent local lows, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract (CFD) is relatively stronger, as it trades close to long-term highs. The nearest important level of resistance is at around 4,330, marked by recent high, and support level is at 4,300-4,310, among others, as the 15-minute chart shows:

Concluding, the broad stock market is in a short-term consolidation, as it moves along record highs. There have been no confirmed negative signals so far. However, we still expect a downward correction or an uptrend reversal. Therefore, we continue to maintain our speculative short position. Stop-loss is at 2,085 and potential profit target is at 1,950 (S&P 500 index). It is always important to set some exit price level in case some events cause the price to move in the unlikely direction. Having safety measures in place helps limit potential losses while letting the gains grow.