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).
S&P 500 fluctuates after the rally – will the uptrend resume?
The S&P 500 index lost 0.16% on Thursday as it went sideways following a week-long advance. Recently it rallied on worse than expected economic data amidst reduced pressure for the further monetary policy tightening. Last week on Friday the index bounced from the daily low of around 4,356 despite hawkish speech from the Fed Chair Powell and earlier it has been selling off on strengthening U.S. dollar, among other factors.
Stocks are expected to open 0.5% higher today following higher than expected Nonfarm Payrolls release and higher than expected Unemployment Rate number. Yesterday the S&P 500 remained above the 4,500 level as we can see on the daily chart:
Futures Contract Is at New Local High
Let’s take a look at the hourly chart of the S&P 500 futures contract. This morning it’s trading above the 4,540 level and the resistance level is at around 4,540-4,550, marked by the previous local highs.
Conclusion
The S&P 500 index will likely extend its advance at the opening of today’s trading session. Investors’ sentiment improves as the pressure for further monetary policy tightening is somewhat easing. So has the market reversed its downtrend? For now it looks like an advance within a medium-term consolidation following a first half of the year rally.
Here’s the breakdown:
- Stock prices extend their uptrend on weaker economic data.
- The S&P 500 broke above the 4,500 level, but it a short-term consolidation is likely.
- 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
