Indexes Fluctuate Along Record Levels – Will Uptrend Continue?

Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,085 and profit target at 1,950, 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 Friday, as investors continued to hesitate following October-November rally. The S&P 500 index remains close to its Thursday’s all-time high of 2,046.18. The nearest important level of resistance is at around 2,040-2,050, and the support level remains at 2,020-2,025, marked by previous local extreme levels. There have been no confirmed negative signals so far, however, we still can see some overbought conditions:

Expectations before the opening of today’s trading session are slightly negative, with index futures currently down 0.2-0.3%. The European stock market indexes have lost 0.2-0.4% so far. Investors will now wait for some economic data announcements: Empire Manufacturing at 8:30 a.m., Industrial Production, Capacity Utilization at 9:15 a.m. The S&P 500 futures contract (CFD) extends its short-term consolidation, as it moves along the level of 2,030. The resistance level remains at around 2,040, and the nearest important level of support is at 2,025, as we can see on the 15-minute chart:

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it fluctuates along the level of 4,200. The nearest important resistance level is at around 4,220-4,230, marked by recent highs. On the other hand, support level remains at around 4,190- 4,200, as the 15-minute chart shows:

Concluding, the broad stock market remains close to all-time highs, as it extends recent fluctuations. We expect a downward correction or an uptrend reversal. Therefore, we continue to maintain our speculative short position. Stop-loss is at 2,085 and potential profit target is at 1,950 (S&P 500 index). 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.