Stock Trading Alert: Indexes May Open Higher As Investors' Sentiment Improves

By: Paul Rejczak | Mon, Aug 25, 2014
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Stock Trading Alert originally published on August 25, 2014, 7:10 AM


Briefly: In our opinion, no speculative positions are justified.

Our intraday outlook is neutral, 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 were mixed between -0.2% and +0.1% on Friday, as investors hesitated following Janet Yellen's speech at Fed's Jackson Hole Conference. Our Friday's neutral intraday outlook has proved accurate. The S&P 500 index remains close to its Thursday's all-time of 1,994.76, slightly below the level of 2,000. The nearest important resistance level is at 1,990-2,000, and the level of support is at 1,970, among others. There have been no confirmed negative signals so far, however, we can see some overbought conditions which may lead to a downward correction:

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Expectations before the opening of today's session are slightly positive, with index futures currently up 0.2-0.3%. The main European stock market indexes have gained 0.9-1.0% so far. Investors will now wait for the New Home Sales data release at 10:00 a.m. This report indicates the level of new privately owned one-family houses sold and for sale. However, it is considered to be a lagging indicator of demand in the market. The S&P 500 futures contract (CFD) trades close to its new intraday all-time high, just below the level of 2,000. On the other hand, the level of support is at around 1,980-1,985, marked by recent local lows, as we can see on the 15-minute chart:

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The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it trades just below its long-term high. The nearest important resistance level is at around 4,080-4,100, and the support level is at 4,050-4,060, among others, as the 15-minute chart shows:

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Concluding, the broad stock market extends its uptrend, as the S&P 500 index trades close to the level of 2,000. There have been no confirmed negative signals so far. However, there are some negative technical divergences, accompanied by short-term overbought conditions. In our opinion, no speculative positions are justified. We still prefer to be out of the market , just to avoid low risk/reward ratio trades. We will let you know when we think it is safe to get back in the market.

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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