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 went sideways again – will they gain after the Fed?

The S&P 500 index lost 0.22% on Tuesday after bouncing from new local low of around 4,417. The stock market has extended its consolidation following the late August rebound. Last week it was gaining after the CPI and PPI releases, but on Friday stocks retraced the whole advance. 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. Today it will be all about the FOMC monetary policy release at 2:00 p.m. The market will likely be very volatile later in the day.

Stocks are expected to open 0.3% higher this morning. So the S&P 500 may break above the 4,450 level again. It continues to trade within a consolidation as we can see on the daily chart:

Futures Contract Is Slightly Above 4,500

Let’s take a look at the hourly chart of the S&P 500 futures contract. It’s trading close to the 4,500 level again. The resistance level remains at around 4,520 and the support level is at 4,450-4,460, among others.

Conclusion

The S&P 500 is expected to open higher this morning, but investors will be waiting for the important FOMC Rate Decision at 2:00 p.m. and the Press Conference at 2:30 p.m.

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.

Here’s the breakdown:

• Investors are waiting for the Fed Rate Decision today.
• Recently the S&P 500 bounced from the 4,500 level; there may be more uncertainty following late August rebound.
• 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