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 bounced from new local lows – is a correction over?
The S&P 500 index lost 0.32% yesterday after bouncing from the new local low of around 4,430. It extended a week-long decline and a correction of its late August rally. Stock prices continue to move sideways following their advances from March to July. Recently investors took profits off the table due to strengthening U.S. dollar, among other factors.
The S&P 500 will likely open virtually flat today. So it may see a consolidation following a week-long decline. Yesterday it retraced more of the recent rebound as we can see on the daily chart:
Futures Contract Trades Sideways
Let’s take a look at the hourly chart of the S&P 500 futures contract (the continuous contract series has changed to December one). This morning it is trading sideways. The resistance level is at around 4,550, among others.
Conclusion
Stocks will likely open virtually flat today and the market may see a consolidation following its recent declines. Last week 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’s local lows resistance level.
Here’s the breakdown:
- Stock prices got back to their mid-August trading range; it may act as s support level.
- The S&P 500 will likely trade along the 4,450 level for some time.
- 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
