Trading position (short-term, our opinion; levels for S&P 500 continuous futures contract): No positions are currently justified from the risk/reward point of view.
The S&P 500 index retraced its Friday’s sell-off yesterday. Was it an upward reversal’s confirmation or still just a consolidation following the recent declines?
The broad stock market index gained 2.65% on Monday, following its Thursday’s advance of 2.6% and Friday’s decline of 2.4%. Stock prices continue to fluctuate on mixed economic data releases, fear concerning Central Banks’ tightening monetary policies, Russia-Ukraine war and an energy crisis. On Thursday the index bounced from the new medium-term low of 3,491.58. This morning the S&P 500 will likely open 2.3% higher, so it’s going to break above the local highs. Investors will now wait for the quarterly corporate earnings – today from NFLX and tomorrow from TSLA, among others.
Futures Contract Gets Closer to Previous High
Let’s take a look at the hourly chart of the S&P 500 futures contract. It retraced the recent decline, as it got closer to the resistance level of 3,800. We may see an attempt at breaking above that level.
In our opinion, no positions are currently justified from the risk/reward point of view. (chart by courtesy of http://tradingview.com):
Conclusion
Stock prices will open much higher this morning, as the sentiment remains positive following yesterday’s S&P 500’s rally of 2.7%. However, we may see an intraday profit-taking action and some correction, as the important short-term resistance level remains at 3,800.
Here’s the breakdown:
- S&P 500 will likely extend its yesterday’s rally this morning; the market may break above the 3,800 level in the near term.
- In our opinion, the short-term outlook is neutral.
As always, we’ll keep you, our subscribers, well-informed.
Trading position (short-term, our opinion; levels for S&P 500 continuous futures contract): No 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
