Our intraday outlook is bearish, and our short-term outlook is bearish. Our medium-term outlook remains neutral, following S&P 500 index breakout above last year's all-time high:
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): neutral
The U.S. stock market indexes were mixed between -0.3% and +0.1% on Friday, as investors continued to hesitate following series of economic data announcements, including last Wednesday's Fed's Rate Decision. All the main stock market indexes have reached new all-time highs recently. The S&P 500 index trades just 0.5% below its new record high of 2,446.20. It has broken above week-long consolidation along 2,400 mark. Stocks have rebounded strongly after their mid-May quick two-session sell-off and continued over eight-year-long bull market off 2009 lows. The Dow Jones Industrial Average remained close to Wednesday's new record high of 21,391.97. The technology Nasdaq Composite was still relatively weaker than the broad stock market, as it lost 0.2%. It continued to fluctuate following its recent move down. The nearest important resistance level of the S&P 500 index remains at around 2,440-2,450, marked by new record high, among others. On the other hand, support level is at around 2,415-2,420, marked by previous resistance level. The next support level is at 2,400-2,410, marked by the May 25 daily gap up of 2,405.58-2,408.01, among others. The support level is also at 2,390-2,395, marked by some short-term local lows. Will the uptrend continue towards 2,500 mark? There have been no confirmed negative signals so far. However, we can see some overbought conditions and negative technical divergences. The S&P 500 index is currently trading within a two-week-long consolidation, as we can see on the daily chart:
Close To Record High
Expectations before the opening of today's trading session are positive following an overnight move up, with index futures currently up 0.3-0.6% vs. their Friday's closing prices. The European stock market indexes have gained 0.6-0.9% so far. There will be no new important economic data announcements today. The S&P 500 futures contract trades within an intraday uptrend, as it gets closer to its recent local highs, and the record high along the level of 2,445. The nearest important level of resistance is at 2,440-2,445. Potential resistance level is also at 2,450. On the other hand, level of support is at 2,430, marked by Friday's closing price. The next support level remains at 2,415-2,420, marked by recent local lows. The market trades within a short-term consolidation, as it is still above the early March local high. Is this a topping pattern before downward reversal? Or just relatively flat correction within an uptrend?
Nasdaq Is Relatively Stronger
The technology Nasdaq 100 futures contract follows a similar path. It is currently trading within an intraday uptrend. The market retraces its recent move down, as it gets back above the level of 5,700 again. The nearest important level of resistance is at around 5,750-5,800, marked by recent consolidation. On the other hand, support level is at around 5,680-5,700, marked by previous level of resistance. The next important level of support is at 5,640-5,650. For now, it looks like a consolidation following recent sell-off. Will the market continue its move down, or is this some bottoming pattern before upward reversal?
Concluding, the S&P 500 index extended its short-term consolidation on Friday, as it remained close to record high of 2,446.20. Will the eight-year-long bull market continue? Or is this a topping pattern before some more meaningful downward correction? There have been no confirmed negative signals so far. However, we still can see negative technical divergences, along with medium-term overbought conditions.
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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.