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 slightly extended their short-term downtrend – is this still just a correction?
The S&P 500 index lost 0.77% on Friday as it retraced its Thursday’s on mixed Manufacturing and Services PMI numbers releases. On Thursday the market bounced from the local low of around 4,352 following economic data releases and Jerome Powell’s Testimony, but on Friday it reached new local low of 4,341.34. There is still a lot of uncertainty concerning monetary policy, some technology stocks’ valuation concerns, but overall, the investors’ sentiment remains bullish.
Stocks will likely open 0.1% lower this morning so the market may see more uncertainty following the recent declines. Last week the S&P 500 broke below its upward trend line as we can see on the daily chart:
Futures Contract Trades Below 4,400
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. The support level is at 4,380 and the resistance level is at around 4,400-4,420.
Conclusion
The S&P 500 is expected to open virtually flat this morning. So the stock market will likely go sideways following the recent decline. It still looks like a correction within an uptrend. The index remains well above its local highs from April and May
Here’s the breakdown:
- The S&P 500 will likely go sideways following its recent declines.
- 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
