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).
Stocks extended their declines yesterday – is it just a correction?
The S&P 500 index lost 0.52% on Wednesday as it extended its Tuesday’s decline of 0.5%. The daily low was at around 4,360, so the index lost almost 90 points from the Friday’s new medium-term high of 4,448.47. On Friday it was the highest since April of 2022. There is still a lot of uncertainty concerning monetary policy, some technology stocks’ valuation concerns, but overall, the investors’ sentiment remains bullish.
Stocks are expected to open 0.3% lower this morning. So the index will extend its correction and it may get back below 4,350 level. On Tuesday the S&P 500 broke below its upward trend line as we can see on the daily chart:
Futures Contract Trades Close to 4,400
Let’s take a look at the hourly chart of the S&P 500 futures contract. It rallied up to around 4,500 level on Friday. This morning it’s trading slightly above the 4,400 level. The resistance level is at 4,500 and the support level is at 4,000, among others.
Conclusion
Stocks will likely extend their short-term correction this morning. The market will be volatile following the Fed Chair Powell’s testimony day 2 at 10:00 a.m. There have been no confirmed negative signals so far.
Here’s the breakdown:
- The S&P 500 will likely extend a correction following last week’s rally.
- There have been no confirmed negative signals so far.
- 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
