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 extended their correction and today the market will bounce – will it resume the uptrend?
The S&P 500 index lost 0.73% on Wednesday as it continued its Tuesday’s decline of 1.2%. The broad stock market index went back to the previous trading range. Stock prices were going down amid short-term profit-taking action caused by the debt ceiling deal fears, among other factors. On Friday the S&P 500 was the highest since last year’s August after bouncing from May 4 local low of 4,048.28.
Stocks will likely open 0.9% higher this morning following yesterday’s NVDA quarterly earnings release. The S&P 500 retraced all of its recent rally yesterday as we can see on the daily chart:
Futures Contract Trades Above 4,150
Let’s take a look at the hourly chart of the S&P 500 futures contract. It bounced from the support level of around 4,100-4,120. The market continues to trade within a consolidation. The resistance level is still at 4,180-4,200.
Conclusion
The S&P 500 is expected to open 0.9% higher this morning. So the broad stock market will retrace its yesterday’s decline. However, it still looks like a consolidation below the 4,200 level. The market may some more uncertainty amid the debt ceiling deal talks.
Here’s the breakdown:
- The S&P 500 extended its short-term downtrend yesterday.
- Stocks will likely retrace some of their declines following better-than-expected NVDA quarterly earnings.
- In my opinion, the short-term outlook is 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
