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).
S&P 500 bounced down from 4,500 again – will it break lower?
The S&P 500 index lost 1.22% on Friday, as it went closer to its recent local lows again. Last week the market was gaining after the Wednesday’s CPI and Thursday’s PPI releases, but it retraced the whole advance on Friday. There’s still a lot of uncertainty about monetary policy, economic growth and stock prices continue to move sideways after their advances from March to July.
Stocks will likely open 0.1% lower today. So the S&P 500 may see more sideways trading action. It continues to trade within a consolidation as we can see on the daily chart:
Futures Contract Trades Slightly Below 4,500
Let’s take a look at the hourly chart of the S&P 500 futures contract. It is trading below the 4,500 level. The resistance level is now at around 4,520 and the support level is at 4,450, among others.
Conclusion
The S&P 500 is expected to go sideways this morning. On Friday it retraced the recent advances and it extended a short-term consolidation below the 4,500 level.
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.
The markets will be waiting for the important FOMC monetary policy release on Wednesday.
Here’s the breakdown:
- Stock prices are expected to fluctuate following their Friday’s weakness.
- The S&P 500 bounced from the 4,500 level; there may be some more uncertainty following late August bounce.
- 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
