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).
Stocks went lower yesterday – is a short-term bottom in sight?
The S&P 500 index lost 0.77% on Thursday as it continued its short-term downtrend after breaking below the 4,400 level. The daily low was at 4,364.83. It was 242.24 points or 5.26% below the July 27 medium-term high of 4,607.07. The market sold off on strengthening U.S. dollar following the Wednesday’s FOMC Meeting Minutes release, among other factors.
The S&P 500 index is expected to open 0.6% lower today. So it will further extend the downtrend. It remains below a month-long downward trend line as we can see on the daily chart:
Futures Contract Broke Below 4,400
Let’s take a look at the hourly chart of the S&P 500 futures contract. This morning it’s trading along new local low. The nearest important support level is now at 4,300-4,320 and the resistance level is at 4.400, among others.
Conclusion
Stocks will likely further extend their downtrend as interest rates fears mount following the Wednesday’s FOMC Meeting Minutes release. However, the market may see a short-term bottom at some point. It still looks like a correction of the uptrend from March lows.
Here’s the breakdown:
- Stock prices extended their downtrend yesterday.
- The S&P 500 broke below the 4,400 level, but it may see a short-term bottom in the near term.
- 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
