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 went sideways following its recent declines. Will it get back higher?
The broad stock market’s index lost 0.19% on Wednesday following its Tuesday’s decline of 1.4%, as it fluctuated within a relatively narrow price range. On Monday the market reversed lower after a better-than-expected ISM Services PMI release, and on Tuesday it was as low as 3,918.39 (going down from its last week’s local high of 4,100.51).
This morning the S&P 500 will likely open 0.5% higher and it may retrace some of the recent move lower. So we may see a short-term rebound. It still looks like a weeks-long consolidation within an uptrend. However, on Tuesday the index broke below its two-month-long upward trend line, as we can see on the daily chart:
Futures Contract – Short-Term Bounce
Let’s take a look at the hourly chart of the S&P 500 futures contract. Recently it broke below the slight upward trend line, and this morning the market is getting back closer to that broken line. The resistance level is at around 3,970-4,000.
Conclusion
Wednesday’s trading session was pretty much uneventful, as the S&P 500 index went sideways and along its Tuesday’s closing price. The market retraced its recent advances, but we may see a short-term upward correction at some point. Investors will be waiting for tomorrow’s PPI release, next week’s Tuesday’s CPI release and Wednesday’s FOMC release.
Here’s the breakdown:
- S&P 500 index will likely retrace some of the recent declines yesterday.
- The market continued to trade along its previous local lows.
- 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
