Investors' Sentiment Continues To Improve, But Will It Last?

Briefly: In our opinion, speculative short positions are favored (with stop‐loss at 2,140 and profit target at 1,990, 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): bearish
Long‐term outlook (next year): bullish

The U.S. stock market indexes gained between 1.4% and 1.9%, extending their recent short‐term uptrend, as investors reacted to Fed Minutes data release. The S&P 500 index got closer to 2,100 mark, as it broke above the resistance level 2,080. The next important level of resistance is at around 2,130, marked by late May all‐time high. On the other hand, support level remains at 2,020‐2,050:

Expectations before the opening of today's trading session are positive, with index futures currently up 0.2‐0.3%. The European stock market indexes have gained 0.9‐ 1.7% so far. Investors will now wait for some economic data announcements: Initial Claims at 8:30 a.m., Philadelphia Fed, Leading Indicators at 10:00 a.m. The S&P 500 futures contract (CFD) trades within an intraday uptrend, as it extends yesterday's advance. The nearest important level of resistance is at around 2,100, and support level is at 2,080, among others, as the 15‐minute chart shows:

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it continues short‐term uptrend. The nearest important level of support is at 4,650, and resistance level is at 4,700‐4,730, marked by record highs, as we can see on the 15‐minute chart:

Concluding, the broad stock market extended its short‐term rally on Wednesday, as investors reacted to Fed's data release. Despite recent rally, there have been no confirmed positive signals so far. Therefore, we continue to maintain our speculative short position (2,088.35, S&P 500 index). Stop‐loss is at 2,140 and potential profit target is at 1,990 (S&P 500 index). 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.