S&P 500 Sets Another Record, But This May Be Short-Term Top

Briefly:

Intraday trade: Our Monday’s intraday trading outlook was bearish. It proved partly wrong, because the S&P 500 gained just 0.2% following slightly lower opening of the trading session. The broad stock market continued its short-term uptrend, but it remained within a relatively narrow trading range. There have been no confirmed negative signals so far. However, we can see some clear short-term overbought conditions along with an overly bullish investors’ sentiment. Therefore, intraday short position is favored today. Stop-loss is at the level of 2,765 and potential profit target is at 2,710 (S&P 500 index).

Our intraday outlook is bearish today. Our short-term outlook is neutral, and our medium-term outlook is neutral:

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

The main U.S. stock market indexes were mixed between -0.05% and +0.3% on Monday, as investors took some short-term profits off the table following recent rally. The S&P 500 index has reached yet another new all-time high at the level of 2,748.51. The broad stock market continues its nine-year-long bull market. The Dow Jones Industrial Average lost 0.05%, as it was relatively weaker than the broad stock market yesterday. The blue-chip index reached new record high at 25,311.99 before closing below its Friday’s trading session close. The technology Nasdaq Composite extended its rally, as it gained 0.3%. It reached new record high above the level of 7,100. The nearest important level of support of the S&P 500 index is at around 2,730, marked by Friday’s daily low. The next support level is at 2,715-2,720, marked by Thursday’s daily gap up of 2,714.37-2,719.07. The support level is also at 2,695-2,700, marked by recent consolidation. On the other hand, potential resistance level is at 2,750. There have been no confirmed negative signals so far. However, we still can see medium-term technical overbought conditions along with negative technical divergences: