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 bounced on Friday, but news about Israeli-Palestinian conflict will likely cause more volatility.
The S&P 500 index gained 1.18% on Friday following better-than-expected monthly jobs data, among other factors. The market bounced from the 4,220 level and it closed above 4,300. Last week on Tuesday it reached new medium-term low of 4,216.45.
Recently the broad stock market index retraced some of the declines, but eventually it went below the 4,300 level again. On Friday it went back above it. There’s still a lot of uncertainty about monetary policy and economic growth.
Stocks will likely open 0.8% lower this morning following news about the Israeli-Palestinian conflict. So the S&P 500 will get back below 4,300 again as we can see on the daily chart:
Futures Contract Remains Close to 4,300
Let’s take a look at the hourly chart of the S&P 500 futures contract. On Tuesday it reached new low of around 4,235 before bouncing back to the resistance level of 4,280-4,300. On Friday the market broke above that resistance level and today it is acting as a support level. On the other hand, the resistance level is now at 4,350, among others.
Conclusion
The S&P 500 will likely retrace some of its Friday’s advance this morning. Markets react negatively to the mentioned Israeli news, and there is still a lot of fear about monetary policy tightening, rallying U.S. dollar. However, the broad stock market will likely extend its consolidation.
Here’s the breakdown:
- Stocks continue to trade within a consolidation; S&P 500 remains close to 4,300.
- 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
