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 bounced on Monday, as the broad stock market index gained 0.7%. Was it an upward reversal or just another correction within a downtrend?

The S&P 500 index gained 0.69% on Monday following its Friday’s decline of 0.7%, as it fluctuated above the 3,850 level. It closed just below the 3,900 level. In early September the market bounced from the 3,900 level and last week on Monday the local high was at 4,119.28.

This morning the S&P 500 index is expected to open 0.6% lower. So the sentiment worsened again and stock prices will likely fluctuate ahead of the important Fed’s Rate Decision release tomorrow.

Futures Contract – More Short-Term Uncertainty

Let’s take a look at the hourly chart of the S&P 500 futures contract. This morning it’s trading slightly below the 3,900 level. The market remains close to the recent local lows and support level is still at 3,850-3,900.

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 will likely open lower today. Stock prices may extend their short-term fluctuations ahead of the crucial Fed’s release tomorrow. There have been no confirmed positive signals so far.

Here’s the breakdown:

• The S&P 500 remains below the 3,900 level; investors will be waiting for tomorrow’s Fed.
• 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