Intraday trade: Our Friday’s neutral intraday outlook has proved accurate. The S&P 500 index fluctuated within a relatively narrow trading range, following Thursday’s sell-off. Thursday’s short intraday trade has also proved accurate. The market reached our profit target level of 2,450 and continued lower on Thursday. The S&P 500 index may fluctuate or rebound today, following last week’s sell-off. Therefore, we prefer to be out of the market today, avoiding low risk/reward ratio trades.
Our intraday outlook is neutral, and our short-term outlook is bearish, as we expect downward correction. Our medium-term outlook is bearish:
Intraday outlook (next 24 hours): neutral
Short-term outlook (next 1-2 weeks): bearish
Medium-term outlook (next 1-3 months): bearish
The U.S. stock market indexes lost between 0.1% and 0.4% on Friday, as investors hesitated following Thursday’s sell-off. The S&P 500 index extended its short-term downtrend off the August 8 all-time high at 2,490.87. It is now trading 2.6% below that record high. Will the downtrend continue? Or is this just quick downward correction before another leg up? The Dow Jones Industrial Average trades below the level of 21,700, and the technology Nasdaq Composite fell close to 6,200 mark, following a rebound off new record high level at 6,460.8. The nearest important level of resistance of the S&P 500 index is now at around 2,435-2,440, marked by recent local lows. The next resistance level is at 2,450, marked by previous level of support. The resistance level is also at 2,465-2,475, marked by previous support level and local highs. On the other hand, support level is at around 2,400-2,420, marked by some previous local lows, among others. The market extended its downward correction following April – August uptrend. There have been no confirmed negative signals so far. Will this short-term downtrend continue? We still can see negative technical divergences:
