Positive Expectations As Investors Bet On Reversal

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): neutral
Long-term outlook (next year): bullish

The main U.S. stock market indexes gained 0.2-0.4% on Friday, as they extended their short-term consolidation following recent move down. Our Friday's neutral intraday outlook has proved accurate. The S&P 500 index trades relatively close to its support level of 2,040-2,050, marked by early March local lows. On the other hand, level of resistance is at around 2,080-2,090, among others. 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 between 0.6% and 0.9%. The European stock market indexes have gained 0.5-1.4% so far. Investors will now wait for some economic data announcements: Personal Income, Personal Spending, PCE Prices-Core number at 8:30 a.m., Pending Home Sales at 10:00 a.m. The S&P 500 futures contract (CFD) is within an intraday uptrend, following Friday's uncertainty. The nearest important level of support remains at around 2,050-2,055, and resistance level is at 2,070-2,080:

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it trades above Friday's consolidation. The nearest important level of support is at 4,300-4,330, and resistance level is at around 4,390-4,400, as the 15-minute chart shows:

Concluding, the broad stock market extended its short-term consolidation on Friday. For now, it looks like some further medium-term consolidation, following last year's October-November rally. 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.

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