Trading position (short-term, my opinion; S&P 500 futures contract): In my opinion, the short-term outlook is neutral and no positions are currently justified from the risk/reward point of view.
Stocks retraced some of their recent advances, as the S&P 500 bounced from 4,200 level – is it just a correction?
The S&P 500 index lost 1.04% on Friday, as it fell below the 4,150 level following much better than expected monthly jobs data, quarterly earnings releases. On Thursday the index reached new medium-term high of 4,195.44 and on Friday it fell to the daily low of 4,123.36. Recently the broad stock market’s gauge was extending its bounce from the January 19 local low of 3,885.54.
Stocks are expected to open 0.8% lower this morning, so they’ll likely extend their Friday’s downward correction. On Thursday the S&P went the highest since late August of 2022 and it got very close to its last year’s August daily gap down resistance level of around 4,200, as we can see on the daily chart:
Futures Contract Is Closer to the Trend Line
Let’s take a look at the hourly chart of the S&P 500 futures contract. It’s trading closer to the upward trend line and the support level of around 4,100. On the other hand, the resistance level remains at 4,150-4,200.
Conclusion
The stock market will likely open lower this morning and it’s expected to continue Friday’s correction. Last week was very busy, so we may see a consolidation and sideways trading action at some point. For now, it looks like a correction within an uptrend.
Here’s the breakdown:
- Stocks may extend their Friday’s decline this morning.
- For now, it looks like a correction within an uptrend.
- In my opinion, the short-term outlook is neutral and no positions are justified from the risk/reward point of view.
As always, we’ll keep you, our subscribers, well-informed.
Trading position (short-term, my opinion; S&P 500 futures contract): In my opinion, the short-term outlook is neutral and no positions are currently justified from the risk/reward point of view.
Thank you.
Paul Rejczak,
Stock Trading Strategist
Sunshine Profits: Effective Investments through Diligence and Care
