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).
The S&P 500 extended its decline yesterday – will it bounce from 4,400?
The broad stock market index lost 0.76% on Wednesday as it went close to the 4,400 level. It was 203.52 points or 4.42% below its July 27 medium-term high of 4,607.07. The market sold off on strengthening U.S. dollar following the FOMC Meeting Minutes release, among other factors.
There is still a lot of uncertainty concerning monetary policy, some technology/AI stocks’ valuation concerns, but investors’ sentiment is still bullish.
The S&P 500 index will likely open 0.3% higher, so the market will retrace some of its yesterday’s decline this morning. The S&P 500 broke below the recent trading range as we can see on the daily chart:
Futures Contract Bounces From New Local Low
Let’s take a look at the hourly chart of the S&P 500 futures contract. This morning it’s retracing some of yesterday’s decline. The nearest important support level is still at 4,420 and the resistance level is now at 4.450, among others.
Conclusion
The S&P 500 index is expected to open 0.3% higher today. It still looks like a correction within an uptrend. However, if the index breaks below the 4,400 level it may see more selling pressure.
Here’s the breakdown:
- Stock prices broke below their recent trading range yesterday.
- The S&P 500 is now close to the 4,400 level; it’s a potential support 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
