Sent to subscribers on April 24, 2017, 6:57 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 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 were mixed between -0.3% and 0.0% on Friday, extending their short-term consolidation, as investors awaited quarterly corporate earnings, economic data releases, French presidential election outcome, among others. The S&P 500 index remained within its week-long consolidation along the level of 2,350, around 2% below the March 1 all-time high of 2,400.98. The Dow Jones Industrial Average closed below the level of 20,600 again, and relatively stronger technology Nasdaq Composite index remained above 5,900 mark, as it continued to trade close to its early April record high. The nearest important level of support of the S&P 500 index is now at around 2,350, marked by previous resistance level. The next support level is at 2,320-2,330, marked by previous short-term consolidation. The support level is also at around 2,270-2,280. On the other hand, the nearest important level of resistance is at 2,365-2,370, marked by some previous local highs. The next resistance level is at 2,380-2,400, marked by record high, among others. We can see some short-term volatility following five-month-long rally off last year's November low at around 2,100. 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 is trading below its medium-term upward trend line, as we can see on the daily chart:
Expectations before the opening of today's trading session are very positive, with index futures currently up 1.0-1.2%. The European stock markets have gained 1.8-4.5% so far. Investors will now wait for more quarterly corporate earnings releases. The S&P 500 futures contract trades within an intraday uptrend following an overnight gap-up opening. The nearest important level of support is at around 2,365, marked by local low. The next support level is at 2,350-2,355, marked by recent consolidation. On the other hand, the nearest important level of resistance is at around 2,375, marked by recent local high. The next resistance level remains at 2,380-2,400, marked by March topping consolidation, and an all-time high slightly above 2,400 mark. Will the market break above almost two-month long consolidation? Or is this just another upward correction? We can see some medium-term negative technical divergences, but will they lead to a downward correction?