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).
Stock prices went even lower on Tuesday – will the downtrend continue despite some oversold conditions?
The S&P 500 index lost 1.16% on Tuesday as it extended a short-term downtrend following Monday’s bounce of 0.6%. Yesterday it was 174.88 points or 3.80% below its July 27 medium-term high of 4,607.07.
There is still a lot of uncertainty concerning monetary policy, some technology/AI stocks’ valuation concerns, but investors’ sentiment remains bullish.
Stocks are expected to open 0.1% lower today. So the market will likely go sideways following yesterday’s decline. Investors will be waiting for the important FOMC Meeting Minutes release at 2:00 p.m. The S&P 500 remains below the 4,500 level as we can see on the daily chart:
Futures Contract Trades Along New Low
Let’s take a look at the hourly chart of the S&P 500 futures contract. This morning it’s trading along the 4,450 level. The nearest important support level is at 4,420-4,440 and the resistance level is at 4.480-4,500, among others.
Conclusion
The S&P 500 index is expected to open relatively flat following its yesterday’s decline. The market is waiting for the FOMC release today. It still looks like a correction within an uptrend. However, stocks may see some more uncertainty.
Here’s the breakdown:
- Stock prices extended their downtrend yesterday.
- The S&P 500 failed to get back above the 4,500 level.
- 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
