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).
Stock prices were falling after the Fed’s release yesterday, but will the market continue lower?
The S&P 500 index lost 1.65% on Wednesday as it retraced its intraday advance following the FOMC monetary policy release and Jerome Powell’s Press Conference. Yesterday’s daily high was at 4,039.40, and the S&P 500 was the highest since March 7. The stock market retraced most of its early March decline. However, the intraday reversal brought the index back below the 3,950 level again.
Last week on Monday 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.
The S&P 500 index will likely open 0.5% higher this morning. It may extend a consolidation below the 4,000 level. The index went back to its recent consolidation as we can see on the daily chart:
Futures Contract Trades Slightly Below 4,000
Let’s take a look at the hourly chart of the S&P 500 futures contract. It retraced yesterday’s rally and got close to the 4,000 level again. The resistance level is at 4,000-4,050 and the support level is at around 3,950-3,980.
Conclusion
Stocks are expected to open higher this morning. The market may retrace some of its yesterday’s post-Fed sell-off. So it may see more short-term uncertainty. There have been no confirmed negative signals.
Here’s the breakdown:
- Stock prices were volatile following the Fed’s release and they sold off at the end of the day.
- The S&P 500 will likely extend its consolidation along the 4,000 level.
- 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
