Negative Expectations Following Short-Term Consolidation

Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,030, and a profit target at 1,900, 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 were virtually flat on Wednesday, as investors hesitated following recent rally. The S&P 500 index remains close to its all-time high of 2,005.04, trading along the level of 2,000. The nearest important resistance level is at around 2,000-2,005. On the other hand, the level of support is at 1,980-1,990, marked by some of the recent local lows. There have been no confirmed negative signals so far. However, we can see negative divergences, accompanied by some technical overbought conditions:

Expectations before the opening of today’s session are negative, with index futures currently down 0.3%. The European stock market indexes have lost 0.4-0.8% so far. Investors will now wait for some economic data announcements: Initial Claims, GDP –Second Estimate at 8:30 a.m., Pending Home Sales at 10:00 a.m. The U.S. GDP figure will be closely watched as markets are expecting a confirmation of an economic rebound. The S&P 500 futures contract (CFD) is in a descending intraday channel, as it trades below the level of 2,000. The resistance level is at around 2,000, and the nearest important level of support is at 1,980-1,985, among others, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract (CFD) is in an intraday downtrend, as it trades below the level of 4,080. The resistance level remains at 4,080-4,100, and the nearest important level of support is at around 4,050-4,060, as the 15-minute chart shows:

Concluding, the broad stock market remains close to its all-time high. There have been no confirmed uptrend reversal signals so far. However, we can see some negative technical divergences. We remain cautiously pessimistic, expecting a downward correction. Therefore, we continue to maintain our speculative short position (entry point at 2,000.5 - S&P 500 index). The stop-loss is at 2,030, and potential profit target at the level of 1,900 (S&P 500 index).