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).
Stock prices advanced despite Israeli-Palestinian conflict news - is this a new uptrend?
The S&P 500 index gained 0.63% on Monday as it extended its Friday’s bounce of 1.2%. On Friday the market rallied following better-than-expected monthly jobs data, among other factors. The index 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 are expected to open virtually flat today. So the market may see some short-term uncertainty following the advance. The S&P 500 got closer to the Sept. 21 daily gap down of 4,375.70-4,401.38 as we can see on the daily chart:
Futures Contract Trades Above 4,350
Let’s take a look at the hourly chart of the S&P 500 futures contract. Last week on Tuesday it reached new low of around 4,235 before bouncing back above the 4,300 level. The resistance level is now at 4,380-4,400 and the support level is at 4,350, among others.
Conclusion
The S&P 500 is expected to open virtually flat this morning. Yesterday global markets reacted negatively to the mentioned Israeli news, but the index managed to retrace its declines. Investors will now wait for the important PPI release tomorrow and the CPI release on Thursday. The market will also wait for the coming quarterly earnings announcements.
Here’s the breakdown:
- Stocks advanced despite negative geopolitical news.
- The S&P 500 got closer to its late September daily gap down; it may act as a resistance level.
- 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
