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).

The S&P 500 continues to fluctuate along 4,500 – is this still just a correction of the uptrend?

The broad stock market index gained 0.03% on Thursday after trading within a relatively wide price range following the CPI release. The market broke above 4,500 level before going down to the new local low of 4,457.92. Yesterday it was 149.1 points or 3.24% below its July 27 medium-term high of 4,607.07.

There is still a lot of uncertainty concerning monetary policy, some technology/AI stocks’ valuation concerns, but investors’ sentiment remains bullish.

The S&P 500 will likely open 0.2% lower this morning after a little higher than expected Producer Price Index release. It was at +0.3% m/m. Recently the S&P 500 broke below a two-month-long upward trend line last week as we can see on the daily chart:

Futures Contract Trades Below 4,500

Let’s take a look at the hourly chart of the S&P 500 futures contract. This morning it’s trading below the 4,500 level. The nearest important support level is now at 4,450 and the resistance level is at 4.500, among others.

Conclusion

Stocks are expected to open lower today. It still looks like a correction within an uptrend. However, the market may see some more uncertainty.

Here’s the breakdown:

• The S&P 500 continues to trade along the 4,500 level after bouncing off the recent high of around 4,607.
• 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