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).
Stock prices reach new medium-term highs – will the Fed spoil bulls’ party?
The S&P 500 index gained 0.46% on Tuesday as it further extended its uptrend after breaking above the July high of around 4,607. Yesterday the daily high was at 4,643.92 and it was the highest since March of 2022. Investors’ sentiment is still bullish despite interest rates uncertainty, mixed economic data.
Recently the S&P 500 broke above the resistance level marked by the technically important August 2 daily gap down of 4,551-4,568. The market resumed its rally from October 27 local low of 4,103.78. On Friday it broke slightly above its July local high of 4,607.
Stocks will likely open 0.2% higher today, but the main event of the day will be FOMC release at 2:00 p.m., and Fed Chair Powell’s Press Conference at 2:30 p.m. S&P 500 is at new yearly highs as we can see on the daily chart:
Futures Contract Is Slightly Above 4,700
Let’s take a look at the hourly chart of the S&P 500 futures contract. It’s trading along the 4,700 level this morning. The nearest important support level is now at around 4,650-4,670.
Conclusion
The S&P 500 is expected to reach new local high this morning as investors’ sentiment is bullish ahead of the important FOMC release later in the day.
There have been no confirmed negative signals so far, but the market may see a downward correction at some point.
Here’s the breakdown:
- The S&P 500 will extend its uptrend, but due to the Fed’s news it may be volatile later in the day.
- There may be a downward correction at some point.
- In my opinion, the short-term outlook is still 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
