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 extended their rebound yesterday – has the downtrend reversed?

The S&P 500 index gained 0.65% on Tuesday as it retraced more of the recent declines following Monday’s advance of 1.2%. Yesterday it reached the daily high of 4,195.55. Recently the market kept selling-off on geopolitical uncertainty, stronger U.S. dollar, among other factors. Friday’s low was at 4,103.78 and it was the lowest since May 12. In the previous week the market bounced from the 4,400 resistance level.

In early October stocks were rallying from their local lows along 4,220 level and on October 17 the index reached a local high of 4,394. There’s still a lot of uncertainty about monetary policy, economic growth and geopolitics.

Stocks will likely open 0.1% higher today, so the S&P 500 index may go along its yesterday’s closing price. Investors will be waiting for the important FOMC Interest Rate Decision announcement at 2:00 p.m. and the FOMC Press Conference at 2:30 p.m. The index extends its advance after breaking above the downward trend line on Monday as we can see on the daily chart:

Futures Contract Trades Above 4,200

Let’s take a look at the hourly chart of the S&P 500 futures contract. On Friday it bounced from 4,120 level. The resistance level remains at around 4,220, marked by the previous support level and the support level is at 4,150.

Conclusion

The S&P 500 will open relatively flat following its recent rebound. Investors will be waiting for the important FOMC Interest Rate Decision release at 2:00 p.m. There will likely be an increased volatility following that event. Also, tomorrow we will get the quarterly earnings release from AAPL.

Here’s the breakdown:

• The stock market awaits today’s FOMC release.
• The S&P 500 remains is close to the important 4,200 level again.
• 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