Stock Trading Alert: Friday's Selloff – New Downtrend Or Just A Short …
Stock Trading Alert: Friday’s Selloff – New Downtrend Or Just A Short-Term Pullback?
By:
| Mon, Apr 7, 2014
Stock
Trading Alert originally published on Apr 07, 2014, 6:05 AM:
Briefly: In our opinion no speculative positions are justified.
Our intraday outlook is neutral, and our short-term outlook is now neutral,
following Friday’s move down:
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 U.S. stock market indexes lost between 1.0% and 2.7% on Friday, as investors
reacted negatively to monthly jobs data release. However, the S&P 500 index
has managed to reach yet another new intraday all-time high at 1,897.28, before
going down to its daily low at 1,863.26. The nearest important resistance remains
at 1,880-1,900, and the support is at 1,840-1,850, marked by March local lows,
among others. For now, it looks like some sort of a medium-term topping pattern,
however, further consolidation along the level of 1,850-1,900 cannot be ruled
out:
Expectations before the opening of today’s session are negative, with index
futures currently down 0.3-0.7%. The main European stock market indexes have
lost 0.5-1.1% so far. The S&P 500 futures contract (CFD)
trades in a relatively narrow intraday range, following Friday’s selloff. The
nearest resistance is at around 1,860, with potential support at 1,840-1,850,
marked by the late March local lows, as the 15-minute chart shows:
The technology Nasdaq 100 futures contract (CFD) is relatively weaker, as
it trades below its March lows. The resistance is at around 3,550, and a potential
support is at the psychological level of 3,500. There have been no positive
signals so far, however, we can see some oversold:
So, was Friday’s selloff a new downtrend or just a short-term pullback? It’s
a tough call right now – the signals are mixed and the outlook is unclear.
The reason is that the S&P 500 index has invalidated its recent breakout
into new all-time highs – extending March consolidation. The question is if
it’s still a consolidation (bullish implications) or has the consolidation
already ended and we should treat breakout’s invalidation on a stand-alone
basis (bearish implications). Things should become much clearer in the coming
days – stay tuned.
Thank you.
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Author: Paul Rejczak
Paul Rejczak
Stock Trading Strategist
Stock
Trading Alerts
SunshineProfits.com
Stock market strategist, who has been known for quality of his technical and
fundamental analysis since the late nineties. He is interested in forecasting
market behavior based on both traditional and innovative methods of technical
analysis. Paul has made his name by developing mechanical trading systems.
Paul is the author of Sunshine Profits‘
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Trading Alerts.
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