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 rallied on worse data – will they get back to highs?
The S&P 500 index gained 1.45% on Tuesday as it got close to the 4,500 level following worse than expected jobs data, among other factors. On Friday the market bounced from the daily low of around 4,356 despite a hawkish speech from the Fed Chair Powell. Recently the market was selling off on strengthening U.S. dollar, among other factors.
Stocks are expected to open virtually flat this morning. So the index may go sideways after the yesterday’s advance. The S&P 500 broke above an over month-long downward trend line as we can see on the daily chart:
Futures Contract Is Above 4,500
Let’s take a look at the hourly chart of the S&P 500 futures contract. This morning it’s trading above the 4,500 level. The nearest important level of resistance is at around 4,540-4,550, marked by the previous local highs.
Conclusion
Yesterday the S&P 500 index rallied and this morning it will likely open virtually flat. Stocks broke above their recent local highs after economic data releases. So has the market reversed its downtrend? For now it looks like an advance within a medium-term consolidation following a first half of the year rally.
Here’s the breakdown:
- Stock prices retraced more of their recent declines yesterday.
- The S&P 500 went back to 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
