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 retraced its recent advances yesterday – will it continue downwards today?
The S&P 500 index lost 0.88% on Thursday following its Wednesday’s decline of 1.1%, as it broke below the 4,100 level on stronger U.S. dollar, global markets’ sentiment. The broad stock market retraced some of the recent rally after bouncing from the 4,200 resistance level. Last week on Thursday the S&P 500 reached new medium-term high of 4,195.44 and yesterday it fell to the local low of 4,069.67. Recently the broad stock market’s gauge was extending its bounce from January 19 local low of 3,885.54.
Stocks will likely open 0.5% lower today, and the S&P 500 index may fluctuate below the 4,100 level. It broke the upward trend line yesterday, as we can see on the daily chart:
Futures Contract Remains Below 4,100
Let’s take a look at the hourly chart of the S&P 500 futures contract. It also broke its upward trend line yesterday, and this morning the market is trading along the 4,070 level. The nearest important resistance level is at around 4,080-4,100.
Conclusion
The S&P 500 will likely get back to its yesterday’s low this morning. There’s a lot of uncertainty ahead of the next week’s Tuesday’s CPI release, possible escalation of the Russia-Ukraine conflict. However, it still looks like correction within an uptrend.
Here’s the breakdown:
- The S&P 500 index broke below the 4,100 level yesterday.
- Stock prices are expected to open lower, and the market may see more uncertainty ahead of next week’s important data releases.
- 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
