Trading position (short-term, our opinion; S&P 500 futures contract): In my opinion, the short-term outlook is bullish and long positions are currently justified from the risk/reward point of view (since Feb. 27 before session’s open).
Stock prices were falling after the Powell’s testimony – is this a new downtrend?
The S&P 500 index lost 1.53% on Tuesday, as investors reacted to the hawkish testimony from the Fed Chief Powell. On Monday the index reached the local high of 4,078.49, and yesterday it went below the 4,000 level again.
Recently the index was selling off on interest rate, Russia-Ukraine war fears, among other factors, and last week on Thursday it bounced from the local low of 3,928.16.
This morning stocks will likely open virtually flat and we may see a short-term consolidation. However, there will be another Powell’s testimony at 10:00 a.m., so the market may see further volatility. The index went back to its short-term downward trend line yesterday, as we can see on the daily chart:
Futures Contract Trades Along 4,000
Let’s take a look at the hourly chart of the S&P 500 futures contract. It’s trading sideways following yesterday’s sell-off. The support level is at 3,930-3,950, among others. On the other hand, the resistance level is now at 4,000-4,020.
Conclusion
The S&P 500 will open relatively flat this morning. For now, it looks like a sideways correction within a short-term downtrend. However, we may see a bottom at some point and a rebound after yesterday’s sell-off.
Here’s the breakdown:
- The S&P 500 will likely fluctuate ahead of the Powell’s another testimony, and there may be more volatility.
- Investors will be waiting for Friday’s monthly jobs data release.
- 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 currently 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
