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 accelerated their uptrend following FOMC release – are they toping?
The S&P 500 index gained 1.37% yesterday and it broke above 4,700 level after the FOMC release. The Fed has basically announced a pivot in its monetary policy – stocks, bond prices, precious metals rallied, and the U.S. dollar sold off. The S&P 500 reached new local high of 4,709.69 and it was the highest since January of 2022. Recently the index broke above its late July local high of around 4,607. It resumed the rally from October 27 local low of 4,103.78.
Stock prices will likely open 0.2% higher this morning. There may be some short-term uncertainty or a quick downward correction following the recent rally. The S&P 500 is at new yearly highs as we can see on the daily chart:
Futures Contract Gets Closer to 4,800
Let’s take a look at the hourly chart of the S&P 500 futures contract. This morning it is trading along the 4,770 level. The resistance level is at 4,800, and support level is now at 4,700-4,720, among others.
Conclusion
The broad stock market index is expected to open relatively flat this morning. So it may see a consolidation or correction following yesterday’s rally.
There have been no confirmed negative signals so far, but the market may see a downward correction at some point.
Here’s the breakdown:
- The S&P 500 is at new medium-term high after breaking slightly above 4,700.
- There may be a downward correction at some point.
- 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
