Trading position (short-term, our opinion; S&P 500 futures contract): In our opinion, the short-term outlook is bullish and long positions are currently justified from the risk/reward point of view.

Stocks went basically sideways last Friday. Will 2023 start on a bullish note?

The S&P 500 index lost 0.25% on Friday, as it continued to fluctuate within a short-term consolidation. On previous week’s Thursday it reached new medium-term low of 3,764.49, before bouncing back above 3,800. Overall it kept extending a consolidation following the decline from 4,100 level. In mid-December the S&P 500 has been negatively reacting to the December 14 FOMC interest rate hike, among other factors.

The S&P 500 will likely open 0.4% higher today. We may see an attempt at breaking above the recent trading range. The S&P 500 index trades within a two-week-long consolidation, as we can see on the daily chart:

Futures Contract is Closer to Recent Highs

Let’s take a look at the hourly chart of the S&P 500 futures contract. It came back to the resistance level of around 3,900. On the other hand, the support level remains at 3,800.

Conclusion

Stocks will likely open higher this morning. The S&P 500 may re-test the resistance level of around 3,900. There have been no confirmed positive signals so far. However, stocks may be forming a bottom here.

Here’s the breakdown:

• The S&P 500 index extended its short-term consolidation last week.
• There have been no confirmed positive signals so far, however, stocks may be forming a bottom.
• In our 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): Long 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