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.
Stock prices extended their short-term consolidation yesterday. Today we may see a small rebound – is this a bottoming pattern or just consolidation before another leg down?
The S&P 500 index gained 0.29% on Wednesday, as it continued to fluctuate following the recent sell-off. The market reacted to U.S. dollar strength, global stock markets’ declines. In the first half of the month 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 Tuesday, August 16 it reached the local high of 4,325.28, and yesterday, the new local low fell at 4,119.97. This morning the S&P 500 index is expected to open 0.4% higher. We’ll likely see more short-term fluctuations.
Futures Contract Got Closer to 4,200 Level
Let’s take a look at the hourly chart of the S&P 500 futures contract. This morning it went closer to the resistance level of 4,200. On the other hand, the support level remains at 4,100-4,120.
In our opinion, no positions are currently justified from the risk/reward point of view. (chart by courtesy of http://tradingview.com):
Conclusion
The S&P 500 index is expected to open higher this morning. We may see another attempt at retracing the recent declines. However, there have been no confirmed positive signals so far. For now, it looks like a flat correction within a downtrend.
Here’s the breakdown:
- The S&P 500 extended its consolidation yesterday; we’ll likely see some more short-term uncertainty.
- 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
