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 before session’s open).
The S&P 500 retraced some of its recent rally on Friday – is this still a bottoming pattern?
The broad stock market index lost 1.10% on Friday following its Thursday’s advance of 1.8% as it reacted to the ongoing banking crisis. On Monday a week ago the index bounced from the local low of 3,808.86, and it was the lowest since January 5. Stocks extended their downtrend on news about the Silicon Valley Bank (SIVB) and the other mid-sized U.S. banks’ situation. On Friday, global markets were declining in a reaction to the Credit Suisse breakdown.
This morning the S&P 500 will likely open 0.3% higher following an overnight rally and a subsequent decline. The index continues to fluctuate below the 4,000 level as we can see on the daily chart:
Futures Contract – More Sideways Trading
Let’s take a look at the hourly chart of the S&P 500 futures contract. It went briefly above the 4,000 level on Friday, and this morning it traded as low as 3,900. The support level remains at 3,850-3,900 and the resistance level is at 3,980-4,000.
Conclusion
Stocks are expected to open higher this morning and they will likely extend their short-term consolidation. The S&P 500 index may be forming a short-term bottom here, however, there have been no confirmed positive signals so far. Investors will be waiting for the important Wednesday’s FOMC release.
Here’s the breakdown:
- The S&P 500 will extend its short-term volatility this morning.
- The market may be forming a bottom here as the Wednesday’s Fed remains in focus.
- 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, 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 before session’s open).
Thank you.
Paul Rejczak,
Stock Trading Strategist
Sunshine Profits: Effective Investments through Diligence and Care
