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.
Stocks extended their short-term fluctuations yesterday, as investors awaited inflation number release, and today they will likely break out of consolidation. But will the market remain bullish at the end of the day?
The S&P 500 index lost 0.42% on Tuesday, as it continued to fluctuate within a short-term consolidation along the 4,100-4,150 level. Recently the broad stock market’s gauge has been extending an almost two-month-long uptrend from the medium-term low of 3,636.87 (June 17) despite the ongoing worries about inflation, tightening Fed’s monetary policy, Russia-Ukraine conflict. This morning the S&P 500 is expected to open 1.6% higher following lower-than-expected Consumer Price Index release (0.0% vs. +0.2% m/m).
Futures Contract – New Local High
Let’s take a look at the hourly chart of the S&P 500 futures contract. It’s breaking above the previous local highs this morning. The resistance level is at around 4,200, marked by the previous highs.
In our opinion, no positions are currently justified from the risk/reward point of view. (chart by courtesy of http://tradingview.com):
Conclusion
The S&P 500 index will open much higher this morning on better-than-expected inflation number release. However, we will likely see an intraday profit-taking action at some point. The market seems to be still struggling along local highs from May.
Here’s the breakdown:
- S&P 500 will likely rally at the open; we may see an attempt at breaking above May local highs.
- In our opinion, no positions are currently justified from the risk/reward point of view.
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
