Sent to subscribers on January 23, 2017, 6:54 AM.
Briefly: In our opinion, speculative short positions are favored (with stop-loss at 2,330, and profit target at 2,150, S&P 500 index).
Our intraday outlook remains 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 0.2% and 0.5% on Friday, extending their short-term consolidation, as investors reacted to economic data releases, Donald Trump's Presidential Inauguration, among others. The S&P 500 index continues to trade close to its January 6 new record high of 2,282.10. Generally, all three major stock market indexes extend their fluctuations along new all-time highs. The Dow Jones Industrial Average trades relatively close to round resistance level of 20,000 and the technology Nasdaq Composite has reached its new record high a week ago at the level of 5,584.26. Will the market extend its year-long medium-term uptrend even further before some more meaningful downward correction? The next possible resistance level of the S&P 500 index remains at 2,300 mark. On the other hand, the nearest support level is at around 2,255-2,260, marked by recent local lows. The next support level is at 2,230-2,240, marked by the late December local low. We can see new long-term highs within almost eight-year-long bull market from 2009 multi-year low of 666.8. However, the index extends its over month-long consolidation. It still trades along medium-term upward trend line, as we can see on the daily chart:
Expectations before the opening of today's trading session are slightly negative, with index futures currently down 0.1-0.2%, as investors take short-term profits off the table following Friday's advance. The market has retraced its Friday's move up. The main European stock market indexes have lost 0.3-0.4% so far. The S&P 500 futures contract trades within an intraday consolidation, following an overnight move down. The nearest important support level remains at 2,245-2,250, marked by previous local low. On the other hand, resistance level is at around 2,270-2,275, marked by local highs. Is this a topping pattern before downward correction of the November - December rally? Or just consolidation within an uptrend? There have been no confirmed negative signals so far. The futures contract continues to trade within an over week-long consolidation along 2,260-2,270, as the 15-minute chart shows: