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).
The S&P 500 keeps going sideways – will CPI release push it higher?
The S&P 500 index lost 0.57% on Tuesday as it continued to fluctuate along the 4,450 level. Recently the market retraced more of the recent declines after bouncing from last week’s local low of around 4,430. There’s still a lot of uncertainty about monetary policy and economic growth. 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 is expected to open 0.2% lower after slightly worse than expected consumer inflation data. The index continues to trade below the 4,500 level as we can see on the daily chart:
Futures Contract Trades Along 4,500
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 still trading above the 4,500 level and within a short-term consolidation. The resistance level remains at around 4,550, among others. On the other hand, the support level is at 4,460-4,480.
Conclusion
Stocks will likely extend their short-term consolidation this morning. The S&P 500 continues to trade sideways following its last week’s rebound.
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:
- Stock prices will likely extends their consolidation today.
- The CPI release led to some volatility, but the S&P 500 may remain relatively close to 4,500 mark.
- 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
