Sent to subscribers on February 16, 2017, 6:55 AM.
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 now 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 0.5-0.6% on Wednesday, extending their short-term uptrend, as investors reacted to economic data, quarterly corporate earnings releases. The S&P 500 index has reached yet another new all-time high at the level of 2,351.30, following slightly lower opening of the trading session. The Dow Jones Industrial Average trades above the level of 20,600, and the technology Nasdaq Composite Index is now above 5,800 mark. All three major indexes trade at new record highs. Will the market extend its year-long medium-term uptrend even further before some more meaningful downward correction? The nearest important level of support of the S&P 500 index is at around 2,320, marked by Monday's daily gap up of 2,319.23-2,321.42. The next support level is at around 2,300-2,310, marked by previous level of resistance and Friday's daily gap up of 2,311.08-2,311.10. We can see some short-term volatility following three-month-long rally off last year's November low at around 2,100. Is this a topping pattern before downward reversal? The uptrend accelerates, and it looks like a blow-off top pattern accompanied by some buying frenzy. The S&P 500 index trades above its medium-term upward trend line, as we can see on the daily chart: