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).

Stocks extended their downtrend yesterday – will they continue lower?

The S&P 500 index lost 0.72% on Thursday as it went closer to the 4,050 level following Wednesday’s FOMC release, among other factors. The daily low was at 4,048.28, but the market closed slightly above the 4,060 level. On Monday the S&P 500 was the highest since February 2 and since then it has retraced all of its last week’s advance.

Stocks will likely open 0.7% higher following better-than-expected monthly jobs data release. So the index will extend a consolidation below the 4,100 level. The S&P 500 bounced from the important 4,200 resistance level again as we can see on the daily chart:

Futures Contract Trades Along 4,100

Let’s take a look at the hourly chart of the S&P 500 futures contract. It is still trading above the support level of 4,080 yesterday. On the other hand, the resistance level remains at 4,160-4,200.

Conclusion

The S&P 500 index is expected to open higher this morning. Stocks will likely fluctuate following their Tuesday’s-Thursday’s sell-off. For now it looks like a further consolidation after March-April advances.

Here’s the breakdown:

• The S&P 500 retraced all of its last week’s rally.
• The market extends its few-weeks-long consolidation.
• In my opinion, the short-term outlook is 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