Trading position (short-term, my opinion; S&P 500 futures contract): In my opinion, the short-term outlook is neutral and no positions are currently justified from the risk/reward point of view.
The S&P 500 index rallied to new local high yesterday – will the uptrend resume?
The broad stock market index gained 1.19% on Monday following its Friday’s 1.9% advance, as it retraced all of the recent decline. The sentiment improved after economic data releases, weakening U.S. dollar, among other factors. The S&P 500 broke below the 3,900 level on Thursday and the local low was at 3,885.54. Yesterday it went the highest since December 14, and the daily high was at 4,039.31.
Stock prices will likely be 0.5% lower this morning, so the market may see more short-term uncertainty and the index will extend its fluctuations along the 4,000 level. The S&P 500 continues to trade within a medium-term consolidation, as we can see on the daily chart:
Futures Contract Trades Above 4,000
Let’s take a look at the hourly chart of the S&P 500 futures contract. On Wednesday it reversed its advance after reaching slightly above the 4,030 level, and on Thursday it went close to 3,900. Yesterday it retraced the decline and reach new local high of around 4,057. The resistance level is still at 4,000-4,050.
Conclusion
Stocks retraced all of their recent decline yesterday, as the S&P 500 index came back above the 4,000 level. The broad stock market may see some more uncertainty ahead of the important economic data and quarterly earnings releases. Today after the session’s close we will have a report from the MSFT, tomorrow from TSLA and on Thursday from INTC, among others.
Here’s the breakdown:
- The S&P 500 index will likely extend its consolidation along the 4,000 level for some time.
- Investors will be waiting for the coming earnings releases.
- In my opinion, the short-term outlook is now neutral and no positions are justified from the risk/reward point of view.
As always, we’ll keep you, our subscribers, well-informed.
Trading position (short-term, my opinion; S&P 500 futures contract): In my opinion, the short-term outlook is neutral and 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
