Stock Trading Alert: Uncertainty Following Yesterday's Move Up - New Uptrend Or Just A Quick Bounce?

By: Paul Rejczak | Thu, Apr 10, 2014
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Stock Trading Alert originally published on Apr 10, 2014, 6:57 AM:


Briefly: In our opinion no speculative positions are justified.

Our intraday outlook remains neutral, as the market may retrace some of yesterday's move up, extending its month-long fluctuations, and our short-term outlook is neutral:

Intraday (next 24 hours) outlook: neutral
Short-term (next 1-2 weeks) outlook: neutral
Medium-term (next 1-3 months) outlook: neutral
Long-term outlook (next year): bullish

The U.S. stock market indexes gained between 1.1% and 1.8% on Wednesday, retracing some of their recent move down, as investors reacted to the FOMC Minutes release, hoping for prolonged easy monetary policy. The S&P 500 index trades higher within its March-April consolidation, after bouncing off the support at around 1,840-1,850. The bounce was not that much of a surprise, as we have stated in our yesterday's forecast: "(...) a downtrend reversal cannot be ruled out - the market is at the support of 1,840-1,850, marked by March consolidation, among others". The resistance remains at 1,880-1,900. There is no clear short-term trend, as we can see on the daily chart:

S&P500 Daily Chart
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Expectations before the opening of today's session are negative, with index futures currently down 0.2-0.3%. The European stock market indexes have been mixed so far. Investors will now wait for the Initial Claims data announcement at 8:30 a.m. The S&P 500 futures contract (CFD) has bounced off the support at 1,830-1,840. There is some intraday resistance at around 1,865. For now, it only looks like a correction within downtrend. The resistance remains at 1,875-1,890, as the 15-minute chart shows:

S&P500 15-Minute Chart
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The technology Nasdaq 100 futures contract (CFD) has followed a similar path, bouncing off the support at 3,480-3,500. The nearest important resistance is at the psychological 3,600. The market remains in a month-long downtrend, as it keeps establishing lower lows and lower highs:

NASDAQ 100 Futures Chart
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Concluding, yesterday's move up looks corrective and there have been no confirmed signals of a new short-term uptrend so far.

Thank you.



Paul Rejczak

Author: Paul Rejczak

Paul Rejczak
Stock Trading Strategist
Stock Trading Alerts

Paul Rejczak

Stock market strategist, who has been known for quality of his technical and fundamental analysis since the late nineties. He is interested in forecasting market behavior based on both traditional and innovative methods of technical analysis. Paul has made his name by developing mechanical trading systems. Paul is the author of Sunshine Profits' premium service for stock traders: Stock Trading Alerts.

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