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 sold off yesterday – will they extend their declines today?
The S&P 500 index lost 1.56% on Wednesday following much lower than expected Producer Price Index and Retail Sales releases and some hawkish remarks form the Fed Members. The broad stock market’s gauge plunged below the 4,000 level again and the daily low was at 3,926.59. The market retraced some of its recent declines after a brief consolidation along the key 4,000 level.
The S&P 500 is expected to open 0.8% lower this morning, so it will likely reach the 3,900 level. Recently the index retraced most of its December decline, but it failed to remain above the 4,000 level, as we can see on the daily chart:
Futures Contract is Selling Off
Let’s take a look at the hourly chart of the S&P 500 futures contract. Yesterday it reversed its advance after reaching slightly above the 4,030 level, and today it’s trading just above the 3,900 level. The resistance level remains at around 4,000-4,050.
Conclusion
Stock prices will likely extend their yesterday’s declines this morning. The market reversed lower form the 4,000 level and it may see more selling pressure. For now, it looks like a short-term downward correction, but overall, the broad stock market is extending an over half-year-long trading range.
Here’s the breakdown:
- The S&P 500 index will likely extend its decline this morning, as it is expected to reach 3,900 level.
- Investors will be waiting for the coming earnings and further economic data releases.
- In my opinion, the short-term outlook is now 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
