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 before session’s open).
The S&P 500 got back to the 4,000 level yesterday – will it continue rallying on Fed day?
The broad stock market index gained 1.30% on Tuesday, as it extended its Monday’s advance of 0.9%. The S&P 500 broke above its recent local highs along the 3,950 level as investors’ sentiment improved ahead of today’s FOMC monetary policy release.
Last week on Monday the index bounced from the local low of 3,808.86, and it was the lowest since January 5. Stocks extended their downtrend on news about the Silicon Valley Bank (SIVB) and the other mid-sized U.S. banks’ situation. On Friday, global markets were declining in a reaction to the Credit Suisse breakdown.
The S&P 500 index is expected to open 0.1% lower this morning, so it may see a short-term consolidation in the first hours of the trading session. The index went the highest since March 9 yesterday as we can see on the daily chart:
Futures Contract Broke Above 4,000
Let’s take a look at the hourly chart of the S&P 500 futures contract. Yesterday the market broke above the 4,000 level and today it’s trading within a consolidation. The nearest important resistance level is at around 4,050 and the support level remains at 3,980-4,000, among others.
Conclusion
Stocks will open virtually flat this morning and the S&P 500 may be going sideways and along the 4,000 level as investors await the Fed’s Rate Decision release at 2:00 p.m. There will likely be an increased volatility following the news at 2:00 p.m. and the Fed’s Press Conference at 2:30 p.m.
Here’s the breakdown:
- The market broke above the recent local highs yesterday.
- The S&P 500 will likely fluctuate ahead of the FOMC release today.
- In my opinion, the short-term outlook is bullish and long positions are 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 before session’s open).
Thank you.
Paul Rejczak,
Stock Trading Strategist
Sunshine Profits: Effective Investments through Diligence and Care
