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 are going sideways following their recent declines – are they forming a bottom?
The S&P 500 index lost 0.13% on Thursday after its Wednesday’s advance of 0.8% and a bounce from Tuesday’s new medium-term low of 4,216.45. On Tuesday it was the lowest since June 1. Recently the broad stock market index retraced some of the declines, but eventually it went below the 4,300 level again. Stocks continued selling off after the previous Wednesday’s FOMC monetary policy release. There’s still a lot of uncertainty about monetary policy and economic growth.
Stocks are expected to open 0.8% lower this morning. The investors’ sentiment worsened following better-than-expected monthly jobs data. The S&P 500 continues to trade below 4,300 as we can see on the daily chart:
Futures Contract Bounced From 4,300 Again
Let’s take a look at the hourly chart of the S&P 500 futures contract. On Tuesday it reached new low of around 4,235 before bouncing back to the resistance level of 4,280-4,300. Right now it is trading closer to lows following monthly jobs data release.
Conclusion
The S&P 500 is expected to open lower this morning. So the broad stock market will likely extend its consolidation. There is still a lot of fear about monetary policy tightening, rallying U.S. dollar.
Investors’ sentiment worsened following the September 20 FOMC Press Conference. Earlier it was improving as the pressure for further monetary policy tightening was somewhat easing.
Here’s the breakdown:
- Stocks extend a consolidation following the recent sell-off..
- The S&P 500 index remains below 4,300 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
