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 from 4,100 level – will it extend the advance?
The S&P 500 index gained 1.20% on Monday as it retraced some of its recent declines after bouncing from $4,100 level. 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 are expected to open 0.4% higher today. So the S&P 500 may extend its yesterday’s advance. It broke above the downward trend line yesterday as we can see on the daily chart:
Futures Contract Trades Close to 4,200
Let’s take a look at the hourly chart of the S&P 500 futures contract. It bounced from 4,120 level recently. The resistance level remains at 4,200-4,220, marked by the previous support level and the support level is at 4,150.
Conclusion
Stock prices will likely extend their yesterday’s bounce this morning. For now it looks like an upward correction following the recent sell-off. The market will be waiting for the important quarterly earnings release from AAPL on Thursday. There will also be the FOMC Rate Decision tomorrow.
Here’s the breakdown:
- Stock prices will likely extend their yesterday’s rebound this morning.
- The S&P 500 remains below the important 4,200 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
