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 bounced on Tuesday, but is their downward correction over?
The S&P 500 index gained 1.15% on Tuesday as it got closer to the 4,400 level again. The market bounced from its Monday’s local low of 4,328.08 and the daily high was at 4,384.42 yesterday.
There is still a lot of uncertainty concerning monetary policy, some technology stocks’ valuation concerns, but the investors’ sentiment remains bullish.
Stocks are expected to open 0.2% lower this morning. The S&P 500 index may fluctuate following yesterday’s rebound. The markets will focus on the Central Banks conference speeches at 9:30 a.m. Last week the S&P 500 broke below its upward trend line as we can see on the daily chart:
Futures Contract Trades Above 4,400 Again
Let’s take a look at the hourly chart of the S&P 500 futures contract. It rallied up to around 4,500 level on Friday, June 16. Since then it has retraced over 100 points. Yesterday it came back above 4,400, but the resistance level is still at around 4,420. On the other hand, the support level is at 4,370.
Conclusion
Stocks will open slightly lower today. They may see more short-term uncertainty following recent advances. Investors will be waiting for Central Bankers speeches this morning. It still looks like a correction within an uptrend and the index remains well above its local highs from April and May.
Here’s the breakdown:
- The S&P 500 will likely fluctuate following its yesterday’s rebound; there may be more short-term volatility..
- For now it looks like a correction within an uptrend.
- In my opinion, the short-term outlook is 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
