Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,410, and profit target at 2,200, S&P 500 index).
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 main U.S. stock market indexes gained between 0.5% and 0.7% on Friday, retracing their Wednesday’s move down, as investors’ sentiment further improved following economic data releases, among others. The S&P 500 index has reached new record high of 2,405.77 on Tuesday. However, it failed to continue the uptrend and sold-off on Wednesday, following a gap down the opening of the trading session. Is last week’s Thursday-Friday rebound an upward reversal or just correction within a new short-term downtrend? The Dow Jones Industrial Average closed slightly the level of 20,800, and the technology Nasdaq Composite index got closer to the level of 6,100 again. The nearest important level of support of the S&P 500 index is now at 2,370, marked by short-term local low. The next support level is at 2,350-2.355, marked by late April daily gap up, among others. The support level is also at 2,320-2,330, marked by previous local lows. On the other hand, the resistance level is now at around 2,385-2,395, marked by Wednesday’s daily gap down of 2,384.87-2,396.05. The resistance level is also at 2,400-2,405, marked by the above-mentioned new record high. Is this a topping pattern before medium-term downward reversal? The uptrend accelerated on March 1 and it looked like a blow-off top pattern accompanied by some buying frenzy. The S&P 500 index trades below its medium-term upward trend line, as we can see on the daily chart:
