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 retraced most of their recent declines on Friday. Will they resume the uptrend?
The S&P 500 index gained 1.89% on Friday, as it went closer to the 4,000 level again. The sentiment improved following economic data releases, weakening U.S. dollar, among other factors. Recently stocks sold off after the Producer Price Index release and Fed Members’ hawkish remarks. The broad stock market’s gauge broke below the 3,900 level on Thursday and the daily low was at 3,885.54. On Friday it went as high as 3,972.96.
Stocks will likely gain 0.2% this morning, so the index may get even closer to the 4,000 level. The S&P 500 continues to trade within a medium-term consolidation, as we can see on the daily chart:
Futures Contract Is Close to 4,000
Let’s take a look at the hourly chart of the S&P 500 futures contract. On Wednesday it reversed its advance after reaching slightly above the 4,030 level, and on Thursday it went close to 3,900. This morning it’s trading higher, as it gets close to the resistance level of 4,000.
Conclusion
Stock prices retraced most of their recent declines on Friday and this morning they’ll likely open slightly higher. The broad stock market may see some more uncertainty ahead of the important economic data and quarterly earnings releases this week. Tomorrow we will have a report from the MSFT, then TSLA on Wednesday, and INTC on Thursday, among others.
Here’s the breakdown:
- The S&P 500 index reversed its short-term downward course on Friday.
- Investors will be waiting for the coming earnings releases and we may see more uncertainty.
- 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
