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 bounced from the new local low yesterday. Was it an upward reversal or just a correction within a downtrend?
The broad stock market index gained 0.30% on Thursday after declining to the new local low of 3,903.65. The market was the lowest since mid-July on rising interest rate fears, strong U.S. dollar. It further extended its decline following last Friday’s sell-off in a reaction to the Fed Chair Powell’s speech.
In the first half of August the S&P 500 was extending its two-month-long uptrend from the medium-term low of 3,636.87 (June 17) despite ongoing worries about inflation, tightening Fed’s monetary policy, Russia-Ukraine conflict. On August 16 it reached the local high of 4,325.28. Today the S&P 500 index will likely open 0.6% higher after a mixed monthly jobs data release. Stock prices may extend their short-term rebound ahead of the long holiday weekend.
Futures Contract Extends Yesterday’s Rebound
Let’s take a look at the hourly chart of the S&P 500 futures contract. It bounced from the local low of around 3,900 yesterday. For now, it looks like an upward correction within a downtrend.
In our opinion, no positions are currently justified from the risk/reward point of view. (chart by courtesy of http://tradingview.com):
Conclusion
Stocks will likely open higher this morning following monthly jobs data release. The S&P 500 index may rebound to the 4,000 level. The market trades within a short-term upward correction. It may also be an upward reversal. However, there have been no confirmed positive signals so far.
Here’s the breakdown:
- The S&P 500 index is expected to extend its yesterday’s intraday rebound this morning; for now it looks like an upward correction.
- In our opinion, no positions are currently justified from the risk/reward point of view.
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
