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 went back below the 3,700 level on Thursday, as investors took profits off the table following the recent advances. Is this still just a downward correction?

There will be no Stock Trading Alerts next week, we apologize for inconvenience.

The S&P 500 index lost 0.8% on Thursday following its Wednesday’s decline of 0.7%, as it further extended a correction from Tuesday’s local high of around 3,763. Recently the market bounced from the new medium-term low of 3,491.58. This morning stocks are expected to open 0.8% lower. There’s still a lot of uncertainty following inflation, rising bond yields, tightening monetary policy fears. We may see some further consolidation.

Futures Contract Trades Below 3,700

Let’s take a look at the hourly chart of the S&P 500 futures contract. It broke the 3,700 level again. The next support level remains at around 3,550-3,600.

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

Conclusion

The S&P 500 index is expected to open 0.8% lower today. There’s still a lot of uncertainty and the stock market keeps extending its consolidation following September’s decline.

Here’s the breakdown:

• Stocks are about to open lower and extend their short-term downtrend; investors will wait for the next week’s earnings releases.
• 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