Stock Trading Alert: New Record Highs As Investors' Sentiment Further Improves

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

Our intraday outlook is neutral, and our short-term outlook is neutral. Our medium-term outlook remains neutral, following S&P 500 index breakout above last year's all-time high:

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

The main U.S. stock market indexes gained 0.6-0.8% on Friday, extending their short-term uptrend, as investors reacted to economic data releases, among others. The S&P 500 index has reached yet another new all-time high at the level of 2,259.80. The nearest important level of support is at around 2,240-2,250, marked by previous level of resistance. The next important support level remains at 2,200-2,220. The market broke above its medium-term upward trend line recently, as we can see on the daily chart:

Daily S&P 500 index chart - SPX, Large Cap Index

 

Expectations before the opening of today's trading session are mixed following an overnight rally. The European stock market indexes have lost 0.1-0.4% so far. The S&P 500 futures contract trades within an intraday consolidation, along its Friday's closing price. The nearest important level of resistance is at around 2,270, marked by new record high. On the other hand, support level is at 2,245-2,250, among others. There have been no confirmed negative signals so far. However, we can see short-term overbought conditions:

S&P 500 futures contract - S&P 500 index chart - SPX

 

The technology Nasdaq 100 futures contract is relatively weaker than the broad stock market, as it currently trade below its Friday's closing price. The nearest important level of resistance is at around 4,900-4,920, marked by local highs. On the other hand, support level is at 4,840-4,850, marked by some recent fluctuations, as the 15-minute chart shows:

Nasdaq100 futures contract - Nasdaq 100 index chart - NDX

 

Concluding, the broad stock market reached yet another new all-time high on Friday, as the S&P 500 index broke above 2,250 mark. We still can see technical overbought conditions. However, there have been no confirmed negative signals so far. Our speculative short position has been closed on Wednesday at the stop-loss level of 2,240 (S&P 500 index). We lost 63 index points on that trade, betting against short-term uptrend off early November local low. It is always important to set some exit price level in case some events cause the price to move in the unlikely direction. Having safety measures in place helps limit potential losses while letting the gains grow. Currently, we prefer to be out of the market, avoiding low risk/reward ratio trades. We will let you know when we think it is safe to get back in the market.

Disclosure: None.

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