Indexes Expected To Open Lower Following Yesterday’s FOMC Decision – Negative Trend Or Just A Temporary Pull-Back?

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

Our intraday outlook remains 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 main U.S. stock market indexes were mixed between -0.2% and +0.4% on Wednesday, extending their short-term consolidation, as investors reacted to some important economic data announcements, quarterly earnings releases, FOMC Rate Decision release. Our yesterday’s neutral intraday outlook has proved accurate. The S&P 500 index remains in a month-long consolidation, below its upward trend line, which is negative. However, there have been no confirmed negative signals so far. The level of resistance is at around 1,990-2,000, marked by July 24 all-time high of 1,991.39. On the other hand, the support level is at 1,950-1,970, marked by previous local lows, as we can see on the daily chart:

Expectations before the opening of today’s session are negative, with index futures currently down 0.5-0.6%. The European stock market indexes have lost 0.2-0.8% so far. Investors will now wait for some economic data announcements: Challenger Job Cuts report at 7:30 a.m., Initial Claims, Employment Cost Index at 8:30 a.m., Chicago PMI at 9:45 a.m. The Chicago PMI report release for the month of July is supposed to be the most important of today’s announcements, as it measures manufacturing and corresponding businesses’ performance for a given month. The S&P 500 futures contract (CFD) is in an intraday downtrend, as it trades below the level of support at around 1,960. The nearest important support level is at 1,945-1,950, as the 15-minute chart shows:

The technology Nasdaq 100 futures contract (CFD) follows a similar path, as it trades below its recent consolidation. The nearest important support level is at around 3,930-3,940, marked by Monday’s local lows. On the other hand, the level of resistance is at 3,950-3,960, among others:

Concluding, the broad stock market extends its short-term consolidation, as the S&P 500 index trades along the level of 1,960-1,980. There have been no confirmed negative signals so far. However, a downward correction cannot be excluded here. We think that it is better to stay out of the market at this time, avoiding 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

Stock Trading Strategist

Stock Trading Alerts

SunshineProfits.com

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Disclaimer

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