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 before session’s open).
The broad stock market index went sideways last week – is this just a correction?
The S&P 500 index gained 0.36% on Thursday, as it continued to fluctuate along the 4,100 level. On Tuesday it reached new medium-term high of 4,133.13 despite the recent banking crisis, Fed’s interest rates worries. The index was the highest since February 16. It was advancing from the March 13 local low of 3,909.16.
Stocks will likely open 0.6% lower this morning. So there will be some more profit-taking action following the recent advances. For now it looks like a correction within an uptrend. The broad stock market remains within its early February topping pattern, and below the important resistance level of 4,200 as we can see on the daily chart:
Futures Contract Trades Closer to 4,100
Let’s take a look at the hourly chart of the S&P 500 futures contract. It’s trading within a short-term consolidation. The nearest important support level is at 4,080-4,100 and the resistance level remains at 4,150-4,170.
Conclusion
Stocks traded within a week-long consolidation following their recent advances and this morning they’ll likely see a lower opening. For now, it looks like a correction within an uptrend, however, we may see more profit-taking action at some point. The markets will be waiting for the important Consumer Price Index release on Wednesday.
Here’s the breakdown:
- The S&P 500 trades within a correction of its recent rally.
- Today stocks will likely open lower, but so far there have been no confirmed negative signals.
- 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 before session’s open).
Thank you.
Paul Rejczak,
Stock Trading Strategist
Sunshine Profits: Effective Investments through Diligence and Care
