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.
Stocks fluctuated following their Tuesday’s sell-off – will they bounce today?
The S&P 500 index lost 0.16% on Wednesday, as it went sideways following its Wednesday’s sell-off of 2.0%. It remained below the 4,000 level after reaching new local low of 3,976.9. There are still fears about monetary policy tightening following a series of better-than-expected economic data releases.
Last week on Tuesday the index bounced from a local high of around 4,160 and yesterday it broke below its short-term trading range. Stocks accelerated their downward correction from the S&P 500’s February 2 new medium-term high of 4,195. Earlier the broad stock market’s gauge was extending its bounce from January 19 local low of 3,885.54.
Stock prices are expected to open 0.3% higher this morning. So we may see more consolidation following the sell-off. There have been no confirmed positive signals. In early February the index broke below the upward trend line, 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. It’s trading slightly above the 4,000 level this morning. The nearest important support level is at 4,000, and the resistance level remains at 4,060-4,100.
Conclusion
The S&P 500 index will likely open 0.3% higher this morning and it may see more short-term consolidation following the recent sell-off. There have been no confirmed positive signals. However, it still looks like a correction of the previous advances.
Here’s the breakdown:
- The S&P 500 index paused on Wednesday, as it fluctuated following its Tuesday’s decline.
- Stock prices will likely extend a short-term consolidation
- In my opinion, the short-term outlook is 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
