Stocks at record highs again, will uptrend continue?

December 12, 2017 07:33 PM

Our Monday's intraday trading outlook was neutral. It proved partly accurate because the S&P 500 gained just 0.3% following slightly higher opening of the trading session. The index extended its short-term uptrend, as it got closer to last week's Monday's all-time high. There have been no confirmed negative signals so far. However, we can see some short-term technical overbought conditions. Therefore, intraday short position is favored today. Stop-loss is at the level of 2,675 and potential profit target is at 2,635 (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 U.S. stock market indexes gained 0.2-0.5% on Monday, extending their Friday's advance following better-than-expected monthly jobs data release. The S&P 500 Index got closer to its last Monday's record high of 2,665.19. It currently trades just 0.2% below that level. The Dow Jones Industrial Average gained 0.2%, and the technology Nasdaq Composite was relatively stronger than the broad stock market, as it gained 0.5%. The nearest important level of support of the S&P 500 Index is at around 2,650, marked by yesterday's daily low. The next support level is at 2,640, marked by Friday's daily gap up of 2,640.99-2,644.10. The support level is also at around 2,625, marked by short-term local low. On the other hand, resistance level is at around 2,665, marked by all-time high. Will the S&P 500 index continue its uptrend? Or is this some volatile topping pattern before medium-term downward correction? There have been no confirmed negative signals so far. However, we still can see medium-term technical overbought conditions along with negative technical divergences:

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