Stocks Extend Their Fluctuations Along Record Highs ‐ Which Direction Is Next?

Briefly: In our opinion, speculative short positions are favored (with stop‐loss at 2,140, and profit target at 1,980, 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): neutral
Long‐term outlook (next year): bullish

The main U.S. stock market indexes lost between 0.5% and 1.0% on Wednesday, as investors reacted to some economic news releases, among others. The S&P 500 index remains relatively close to its late May all‐time high of 2,134.72. The nearest important level of resistance is at 2,130‐2,135, and support level is at 2,100‐2,110. There have been no confirmed negative signals so far, however, we still can see negative technical divergences:

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 lost 0.1‐0.3% so far. Investors will now wait for the economic data announcements: Initial Claims, Personal Income, Personal Spending, PCE Prices ‐ Core number at 8:30 a.m. The S&P 500 futures contract (CFD) trades within an intraday uptrend, as it retraces some of yesterday's move down. The nearest important level of support remains at around 2,100. On the other hand, resistance level is at 2,115‐2,120, as the 15‐minute chart shows:

The technology Nasdaq 100 futures contract (CFD) continues to fluctuate along the level of 4,530. The nearest important level of support is at 4,500‐4,520, and resistance level is at 4,550, as we can see on the 15‐minute chart:

Concluding, the broad stock market retraced some of its recent advance yesterday, as it extended its short‐term consolidation. We continue to maintain our speculative short position (2,098.27, S&P 500 index), as we expect a downward correction or an uptrend reversal. Stop‐loss is at 2,140, and potential profit target is at 1,980. 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.