Trading position (short-term, our opinion; levels for S&P 500 continuous futures contract): No positions are currently justified from the risk/reward point of view.
Stocks prices were little changed on Friday, and today they may pull back – is this a downward reversal?
The S&P 500 index lost 0.03% on Friday, following its Wednesday’s advance of 0.6%, as it remained above the 4,000 level. On Friday it was the highest since September 13, but overall, the trading range was very narrow due to a long holiday weekend and a shortened trading session. In the previous week on Thursday the index bounced from the local low of around 3,907.
This morning the S&P 500 will likely open 0.6% lower. So stock prices will retrace their Wednesday’s advance, and the index will get back to the 4,000 level again.
Futures Contract Remains Close to 4,000
Let’s take a look at the hourly chart of the S&P 500 futures contract. It’s trading along the 4,000 level this morning. The resistance level is at around 4,050, marked by the recent local high. On the other hand, the support level is at 3,950.
In our opinion, no positions are currently justified from the risk/reward point of view. (chart by courtesy of http://tradingview.com):
Conclusion
The S&P 500 index is expected to open 0.6% lower this morning. It will likely extend a short-term consolidation following the recent advances. There have been no confirmed negative signals so far. It looks like a correction or a consolidation within an uptrend. The market will be waiting for the important tomorrow’s CB Consumer Confidence release.
Here’s the breakdown:
- The S&P 500 index continues to fluctuate along the 4,000 level.
- It still looks like a consolidation or a relatively flat correction within an uptrend.
- In our opinion, the short-term outlook is neutral.
As always, we’ll keep you, our subscribers, well-informed.
Trading position (short-term, our opinion; levels for S&P 500 continuous futures contract): No positions are currently justified from the risk/reward point of view.
Thank you.
Paul Rejczak,
Stock Trading Strategist
Sunshine Profits: Effective Investments through Diligence and Care
