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).
The S&P 500 went sideways following last week’s rally – was it a topping pattern?
The S&P 500 index lost 0.20% on Wednesday as it remained close to Friday’s new medium-term high of 4,458.48. On Friday the index was the highest since April of 2022. It retraced all of its recent declines following economic data releases, among other factors.
There is still a lot of uncertainty concerning monetary policy, some technology stocks’ valuation concerns, but the investors’ sentiment remains bullish.
Stocks will likely open 0.8% lower today. The sentiment worsened following much better than expected ADP Non-Farm Employment Change release. The index remains close to its mid-June high as we can see on the daily chart:
Futures Contract Bounced From 4,500
Let’s take a look at the hourly chart of the S&P 500 futures contract. Last week it rallied up to the 4,500 level again and this morning it’s trading closer to 4,450. The support level is at around 4,400-4,420.
Conclusion
The S&P 500 index is expected to open lower this morning so the market will retrace more of its last week’s rally. There have been no confirmed negative signals so far. However, the market may see a more pronounced profit taking action.
Here’s the breakdown:
- The S&P 500 will likely retrace more of its recent rally.
- There have been no confirmed negative signals, however, a short-term downward correction may be in cards.
- In my opinion, the short-term outlook is 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
