More Uncertainty Following Recent Rally - Which Direction Is Next?

Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,140, and profit target at 1,980, S&P 500 index)

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

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

The U.S. stock market indexes were virtually flat on Wednesday, as investors hesitated following recent move up. The S&P 500 index has managed to reach yet another new all-time high at the level of 2,134.72, before closing down 0.1%. The nearest important level of resistance is at around 2,130-2,135. On the other hand, support level is at 2,115-2,120, marked by previous resistance level. There have been no confirmed negative signals so far. However, we can see negative technical divergences:

Expectations before the opening of today's trading session are slightly negative, with index futures currently down 0.1-0.3%. The main European stock market indexes have been mixed so far. Investors will now wait for some economic data announcements: Initial Claims at 8:30 a.m., Existing Home Sales, Philadelphia Fed number, Leading Indicators at 10:00 a.m. The S&P 500 futures contract (CFD) trades within an intraday consolidation, following yesterday's move down. The nearest important level of support is at around 2,110-2,115, marked by recent local lows. On the other hand, resistance level remains at 2,125-2,130, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it fluctuates along the level of 4,490. The nearest important level of support is at around 4,480, and resistance level is at 4,500-4,520, among others, as we can see on the 15-minute chart:

Concluding, the broad stock market extended its fluctuations along its record highs yesterday. There have been no confirmed negative signals so far. However, we continue to maintain our speculative short position (2,098.27, S&P 500 index), as we expect a downward correction or an uptrend reversal. Stop-loss is at 2,140, and potential profit target is at 1,980. You can trade S&P 500 index using futures contracts (S&P 500 futures contract - SP, E-mini S&P 500 futures contract - ES) or an ETF like the SPDR S&P 500 ETF - SPY. 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.