Trading position (short-term, our opinion; S&P 500 futures contract): In my opinion, the short-term outlook is bullish and long positions are still justified from the risk/reward point of view (since Feb. 27).
Stocks retraced more of their recent declines, but will they resume the uptrend?
The S&P 500 index gained 0.67% on Monday as it went closer to the 4,500 level again. The market retraced more of the recent declines after bouncing from last week’s local low of around 4,430. Investors are waiting for the important Consumer Price Index release tomorrow. There’s still a lot of uncertainty about monetary policy and economic growth. Stock prices continue to move sideways following their advances from March to July. Recently investors took profits off the table due to strengthening U.S. dollar, among other factors.
The S&P 500 will likely open 0.2% lower today. So it may see some uncertainty following the rebound. The index is now slightly below the 4,500 level as we can see on the daily chart:
Futures Contract Remains Above 4,500
Let’s take a look at the hourly chart of the S&P 500 futures contract (the continuous contract series has changed to December one). This morning it’s trading within a consolidation. The resistance level remains at around 4,550, among others.
Conclusion
Stocks are expected to open slightly lower this morning. The market may fluctuate ahead of the important consumer inflation data tomorrow.
Recently the investors’ sentiment improved as the pressure for further monetary policy tightening somewhat eased. But stocks retraced most of their late August rally after bouncing off their mid-July local lows resistance level.
Here’s the breakdown:
- Stock prices will likely fluctuate following their short-term rebound.
- Investors will be waiting for the important CPI release tomorrow.
- In my opinion, the short-term outlook is still bullish and long positions are still justified from the risk/reward point of view.
As always, we’ll keep you, our subscribers, well-informed.
Trading position (short-term, our opinion; S&P 500 futures contract): In my opinion, the short-term outlook is bullish and long positions are still justified from the risk/reward point of view (since Feb. 27).
Thank you.
Paul Rejczak,
Stock Trading Strategist
Sunshine Profits: Effective Investments through Diligence and Care
