Briefly: In our opinion, no speculative positions are justified.
Our intraday outlook is neutral, and our short‐term outlook is neutral. Our mediumterm outlook remains bearish, as the S&P 500 index extends its lower highs, lower lows sequence. However, we decided to change our long‐term outlook to neutral recently, following recent move down below medium‐term lows:
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): neutral
The U.S. stock market indexes gained between 1.3% an 2.8% on Friday, retracing some of their recent move down, as investors reacted to oil prices rally, economic data releases. The S&P 500 index extended its Thursday's move up and managed to close above the level of 1,900. The nearest important level of resistance is at around 1,950‐ 1,960, marked by recent local highs. On the other hand, support level remains at 1,850‐ 1,880. For now, it looks like an upward correction within a short‐term downtrend. There have been no confirmed positive signals so far. Quarterly corporate earnings releases may drive stocks higher, however, we will probably see more short‐term volatility:
Expectations before the opening of today's trading session are slightly negative, with index futures currently down 0.2‐0.3%. The main European stock market indexes have been mixed so far. The S&P 500 futures contract trades within an intraday consolidation, following last week's hefty rebound. The nearest important level of resistance is at around 1,900‐1,905. On the other hand, support level is at 1,880‐1,885, marked by some Friday's local lows. The market retraces a part of its recent decline. For now, it looks like a correction within a downtrend. However, there have been no confirmed short‐term negative signals so far:
The technology Nasdaq 100 futures contract follows a similar path, as it currently trades above the level of 4,200. It is worthwhile to mention that it traded below the level of 4,000 on Wednesday. The nearest important level of support is at around 4,200. The resistance level is at 4,250‐4,270, marked by previous intraday local highs. Is this a downtrend reversal or just a quick "oversold" rebound before another leg down? For now, it looks like a correction within a short‐term downtrend. However, we continue to see some clearly bullish action here:
Concluding, the broad stock market extended its short‐term rebound on Friday, as the S&P 500 index broke above the level of 1,900. Is this a new uptrend or just an upward correction before another leg down? For now, it looks like a "V" type bottom, but we will probably see more short‐term volatility ahead. The index may trade along its last year's August ‐ September local lows for some time, as it continues to act as a medium‐term level of support. Our speculative long position (1,891.68, S&P 500 index) has been closed at the stop‐loss level of 1,840 (S&P 500 index) on Wednesday, as the futures contract broke slightly below the level of 1,835 ahead of the cash market's opening (it currently trades around 5 points lower than the cash market). 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.
-------Who were the best experts in 2015? Have your say and vote for FXStreet's Forex Best Awards 2016! Cast your vote now!
-------
All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' employees and 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, Przemyslaw Radomski, CFA 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. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA 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. Przemyslaw Radomski, CFA, 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.
Recommended Content
Editors’ Picks
EUR/USD drops below 1.0800 after German Retail Sales data
EUR/USD has come under fresh selling pressure and trades below 1.0800 after the data from Germany showed that Retail Sales declined by 1.9% MoM in February. Resurgent US Dollar demand is adding to the downside in the pair. US data are next in focus.
GBP/USD stays weak near 1.2600 amid market caution
GBP/USD remains defensive near 1.2600 in European trading on Thursday. The hawkish tone from Fed Governor Christopher Waller keeps the US Dollar afloat amid a cautious trading environment ahead of key US data releases and the Good Friday trading lull.
Gold price holds strength ahead of US core PCE inflation
Gold price holds onto gains near $2,200 in Thursday’s European session. The precious metal exhibits firm footing ahead of the United States core PCE Price Index data for February, which will be published on Friday.
XRP price falls to $0.60 support as Ripple ruling doesn’t help Coinbase lawsuit against SEC
XRP programmatic sales ruling by Judge Torres was completely rejected by another US Court that ruled in favor of the SEC in a lawsuit against Coinbase.
Portfolio rebalancing and reflation trades emerge into Q2
Yesterday’s price action pointed at a possible end-of-quarter portfolio rebalancing as the session saw the laggards of the quarter like Apple and Tesla gain, and the stars like Microsoft and Nvidia retreat.