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 U.S. stock market indexes were mixed between -0.2% and +0.2% on Friday, extending their short-term consolidation along record highs, as investors reacted to quarterly corporate earnings, economic data releases. The S&P 500 index remains close to its March 1 all-time high of 2,400.98. It has closed around 0.7% below that record high on Friday. Will it continue its eight-year-long bull market? The Dow Jones Industrial Average remained slightly below the level of 21,000, and relatively stronger technology Nasdaq Composite index reached new all-time high, as it got closer the level of 6,100. The nearest important level of support of the S&P 500 index is now at 2,375-2,380, marked by last Tuesday’s daily gap up of 2,376.98-2,381.15. The next support level is at 2,355-2,370, marked by Monday’s daily gap up. The support level is also at around 2,350, marked by recent short-term consolidation. On the other hand, the nearest important level of resistance is at 2,400, marked by record high, among others. We can see some 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 currently trading along its medium-term upward trend line, as we can see on the daily chart:

Expectations before the opening of today’s trading session are positive, with index futures currently up 0.2-0.3%. The European stock markets are closed today. Investors will now wait for more quarterly corporate earnings releases, along with some economic data announcements: Personal Income, Personal Spending at 8:30 a.m., ISM Index, Construction Spending at 10:00 a.m. The market expects that Personal Income grew 0.4%, Personal Spending grew 0.2%, and the ISM Index was at 56.6 in April. The S&P 500 futures contract trades within an intraday uptrend, as it retraces its Friday’s move down. The nearest important level of support remains at around 2,375, marked by short-term local lows. The next support level is at 2,365, marked by last week’s Monday’s consolidation. On the other hand, resistance level is at around 2,390-2,400, marked by March topping consolidation, and an all-time high slightly above 2,400 mark. Will the market break above 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?