Trading position (short-term, my opinion; S&P 500 futures contract): In my opinion, the short-term outlook is neutral and no positions are currently justified from the risk/reward point of view.
The S&P 500 extended its downward correction yesterday – will it break below 4,100?
The broad stock market index lost 0.61% on Monday, as it continued its short-term downtrend from last Thursday’s local high of 4,195.44 following the Fed’s Rate Decision, series of economic data and earnings releases. Yesterday the S&P 500 fell to the local low of 4,093.38, but it closed above the 4,100 level. Recently the broad stock market’s gauge was extending its bounce from the January 19 local low of 3,885.54.
The S&P 500 index is likely to open 0.2% lower this morning. So it may get close to 4,100 again. On Thursday the S&P went the highest since late August of 2022 and it got very close to its last year’s August daily gap down resistance level of around 4,200, as we can see on the daily chart:
Futures Contract Remains Above the Trend Line
Let’s take a look at the hourly chart of the S&P 500 futures contract. It’s trading along the upward trend line and the support level of around 4,100. On the other hand, the resistance level remains at 4,150-4,200.
Conclusion
Stocks are expected to open slightly lower this morning. The market will be waiting for the important Fed Chair Powell’s speech at 12:40 p.m. Last week was very busy, so we may see some more consolidation and sideways trading action. For now, it looks like a correction within an uptrend.
Here’s the breakdown:
- The S&P 500 index remains above the 4,100 level following a retreat from last week’s new medium-term high.
- For now, it looks like a correction within an uptrend.
- In my opinion, the short-term outlook is neutral and no positions are justified from the risk/reward point of view.
As always, we’ll keep you, our subscribers, well-informed.
Trading position (short-term, my opinion; S&P 500 futures contract): In my opinion, the short-term outlook is neutral and 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
