Trading position (short-term, my opinion; S&P 500 futures contract): In my opinion, the short-term outlook is bullish and long positions are currently justified from the risk/reward point of view.

Stock prices went sideways following their Monday’s retracement – is this just a pause within an uptrend?

On Monday the S&P 500 index reached new local high of 3,950.57, before retracing the advance and getting back below the 3,900 level, and yesterday it gained 0.70%. The broad stock market broke above its three-week-long trading range following better-than-expected monthly jobs data release on Friday.

The S&P 500 is expected to open 0.4% higher today. It may get back to the recent local high and a short-term resistance level of 3,950. For now, it looks like a flat correction within an uptrend, as we can see on the daily chart:

Futures Contract is Closer to Monday’s High

Let’s take a look at the hourly chart of the S&P 500 futures contract. It is getting back to the resistance level of around 3,975-4,000, marked by Monday’s local high. On the other hand, the support level is at 3,900, among others.

Conclusion

Stock prices will likely extend their short-term gains at the opening of today’s trading session. Recently the market broke above its recent trading range and despite the Monday’s retreat, it looks bullish in the short-term. Investors will be waiting for tomorrow’s Consumer Price Index release and a coming quarterly corporate earnings season. We will have reports from the banking sector on Friday before open.

Here’s the breakdown:

• The S&P 500 index will likely get back close to its Monday’s high this morning.
• Stock prices broke above its recent trading range, which is bullish.
• In my opinion, the short-term outlook is bullish and long 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): Long 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