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 before session’s open).
Stock prices bounced on Tuesday - is Monday’s bottom a final one?
The S&P 500 index gained 1.68% yesterday, as it retraced all of the Friday’s sell-off. The market bounced following its recent sell-off in a reaction to the ongoing U.S. banking crisis. On Monday the index reached new local low of 3,808.86, and it was the lowest since January 5. Stocks extended their downtrend this week on more news about the troubled Silicon Valley Bank (SIVB) and the other U.S. banks’ situation.
This morning stock prices will likely open 1.8% lower following a news about the Europe’s Credit Suisse bank’s troubles. The Producer Price Index release has been generally as expected, but it’s not likely to affect markets that much in a current situation. The index may extend a consolidation along the 3,900 level as we can see on the daily chart:
Futures Contract Is Back Below 3,900
Let’s take a look at the hourly chart of the S&P 500 futures contract. It retraced most of its yesterday’s rally. The support level is at 3,850, among others, and the resistance level remains at 3,980-4,000 (June S&P futures contract).
Conclusion
The S&P 500 is expected to open much lower this morning on more news about the troubled banking sector. This time it’s all about the Credit Suisse bank. The market may be forming a short-term bottom here, however, there have been no confirmed positive signals so far.
Here’s the breakdown:
- The S&P 500 bounced from its Monday’s low, but we may see some more uncertainty following the recent sell-off.
- In my opinion, the short-term outlook is bullish and long positions are 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 before session’s open).
Thank you.
Paul Rejczak,
Stock Trading Strategist
Sunshine Profits: Effective Investments through Diligence and Care
