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).
S&P 500 reached new high, but a downward correction may be coming.
The S&P 500 index gained 0.26% on Thursday as it further extended its uptrend after breaking above the 4,700 level. The daily high was at 4,738.57, and it was the highest since January of 2022. On Wednesday the Fed has basically announced a pivot in its monetary policy – stocks, bond prices, precious metals rallied, and the U.S. dollar sold off. Recently the S&P 500 broke above its late July local high of around 4,607. It resumed the rally from October 27 local low of 4,103.78.
Stocks will likely open 0.1% lower today. So the market may see more short-term uncertainty. For now it looks like a consolidation within an uptrend. The S&P 500 is at new yearly high as we can see on the daily chart:
Futures Contract Trades Sideways
Let’s take a look at the hourly chart of the S&P 500 futures contract. It continues to trade sideways. The nearest important resistance level is at 4,780-4,800 and the support level is at 4,750, among others.
Conclusion
The S&P 500 will likely extend its short-term consolidation this morning. Yesterday there was a profit taking action and some uncertainty following the recent rally.
There have been no confirmed negative signals so far, but the market may see a downward correction at some point.
Here’s the breakdown:
- The S&P 500 trades within a consolidation following recent rally.
- There may be a downward correction at some point.
- 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
