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.

The S&P 500 index retraced some of its recent advances yesterday. Was it just a quick downward correction before another leg up?

The broad stock market index bounced form the daily low of around 3,907, before closing just 0.31% lower yesterday. On Tuesday the broad stock market index reached new medium-term high of 4,028.84 and it was the highest since September 13. In the last trading sessions stock prices fluctuated following their recent rally.

This morning the S&P 500 will likely open 0.8% higher, so it will extend its fluctuations. There’s still a lot of uncertainty concerning the Fed’s monetary policy tightening, Russia-Ukraine conflict, and we may see some more consolidation along the S&P 500’s 4,000 level.

Futures Contract is Closer to 4,000 Again

Let’s take a look at the hourly chart of the S&P 500 futures contract. It bounced from yesterday’s daily low of around 3,913. The resistance level remains at 4,000-4,050.

In our opinion, no positions are currently justified from the risk/reward point of view. (chart by courtesy of http://tradingview.com):

Conclusion

Stock prices continue to fluctuate following their recent advances. Today we’ll likely see a higher opening of the S&P 500 index. The broad stock market remains relatively close to its local high.

Here’s the breakdown:

• The S&P 500 retraced some of the recent advance yesterday.
• It still looks like a consolidation or a relatively flat correction within an uptrend.
• 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