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).
Stocks retraced their rebound – was it just an upward correction before another leg down?
The S&P 500 index lost 1.35% on Thursday as it retraced its intraday advance following better-than-expected earnings release from NVDA. Yesterday’s daily high was at 4,458.30 and the index closed below 4,380. Last week on Friday it was 271.76 points or 5.90% below the July 27 medium-term high of 4,607.07. Recently the market was selling off on strengthening U.S. dollar, among other factors.
Stocks will likely open 0.4% higher today. The market may extend its fluctuations following the mentioned 6% correction from the recent highs. So the S&P 500 will continue to trade below its month-long downward trend line as we can see on the daily chart:
Futures Contract Trades Along 4,400
Let’s take a look at the hourly chart of the S&P 500 futures contract. This morning it is trading along the 4,400 level. It bounced from yesterday’s local high of around 4,485. The nearest important support level is at around 4,380 and the resistance level is at 4,440.
Conclusion
The S&P 500 will likely continue to fluctuate following the recent declines. Today investors will be waiting for the important Fed Chair Powell’s speech at the Jackson Hole Symposium at 10:05 a.m. The market may see an increased volatility.
Here’s the breakdown:
- Stock prices retraced their yesterday’s advance.
- Today it’s all about the Fed Chair Powell’s Jackson Hole speech.
- 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
