The S&P 500 index saw a slight rebound in Wednesday’s trading session but closed lower, signaling a potential new short-term downtrend. Economic data released on Thursday, including a lower-than-expected ADP Non-Farm Employment Change, caused futures contracts to indicate a 0.2% lower opening for the index. Despite the decline, investor sentiment remains elevated, with a higher percentage of investors bullish than bearish.
The Nasdaq 100, which lost 0.20% on Wednesday after a significant sell-off the day before, continues to hover around the 19,000 level. The resistance level for the Nasdaq 100 is at 19,200. The VIX index, a measure of market fear, reached a local high of 23.31 on Wednesday, indicating increasing fear among investors. Historically, a rising VIX signals a stock market downturn.
In terms of futures contracts, the S&P 500 contract is currently trading sideways, likely forming a flat correction of the recent declines. The resistance level is at 5,560, with the support level at 5,480-5,500. Overall, the market picture remains bearish, with a consolidation indicating a flat correction within a downtrend. Economic data released this morning is expected to lead to a 0.2% lower opening for the index, with consolidation continuing around the 5,500 level.
The author maintains a speculative short position in the S&P 500 futures contract from August 20. Looking ahead, the market is likely to extend its short-term declines, with a bearish short-term outlook. The recent volatility in the market, including a sell-off followed by a consolidation near a record high, suggests more turbulence in the coming months. The author’s short-term outlook for September remains bearish.
In conclusion, while Wednesday’s trading session saw a slight rebound, the overall market remains bearish, with a potential new short-term downtrend on the horizon. Investor sentiment, economic data, and technical analysis all point towards further declines in the market. The author’s speculative short position reflects a bearish outlook for the S&P 500 index, with continued consolidation expected around the 5,500 level. Stay informed about market developments by signing up for the author’s free newsletter.
