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 before session’s open).
Stock prices fluctuate ahead of tomorrow’s Fed – will they break higher?
The S&P 500 index gained 0.89% on Monday as it retraced most of the Friday’s decline of 1.1%. Last week on Monday the index bounced from the local low of 3,808.86, and it was the lowest since January 5. Stocks extended their downtrend on news about the Silicon Valley Bank (SIVB) and the other mid-sized U.S. banks’ situation. On Friday, global markets were declining in a reaction to the Credit Suisse breakdown, and yesterday they bounced back on positive banking sector news.
This morning stocks are expected to open 0.8% higher after an overnight global stock markets advance. The index continues to fluctuate below the 4,000 level as we can see on the daily chart:
Futures Contract Trades Above 4,000
Let’s take a look at the hourly chart of the S&P 500 futures contract. It broke above the 4,000 level this morning, but overall, it’s still trading along the previous local highs. The resistance level is now at around 4,050, and the support level is at 3,980-4,000, among others.
Conclusion
The S&P 500 index is expected to break slightly above its recent local highs on positive news from the banking sector. However, tomorrow’s important FOMC release will likely lead to a uncertainty and a consolidation at some point.
The S&P 500 index may be forming a short-term bottom here, however, there have been no confirmed positive signals so far.
Here’s the breakdown:
- The S&P 500 will likely get close to the 4,000 level this morning.
- The market may be forming a bottom here as tomorrow’s Fed event remains in focus.
- In my opinion, the short-term outlook is bullish and long positions are 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 before session’s open).
Thank you.
Paul Rejczak,
Stock Trading Strategist
Sunshine Profits: Effective Investments through Diligence and Care
