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 went sideways on Wednesday, despite worse-than-expected CPI release. Will the downtrend resume today?
The broad stock market’s gauge lost 0.45% on Wednesday after going back below the 3,800 level. The index went to the new local low of around 3,760 following higher-than-expected inflation number release. Last week it bounced down from the 3,900-3,950 resistance level.
There’s still a lot of uncertainty and worries about inflation data, tightening Fed’s monetary policy, Russia-Ukraine conflict and the coming quarterly earnings releases season. And this morning the index is expected to open 1.3% lower. We may see another intraday bounce though.
Futures Contract Trades Along the Previous Lows
Let’s take a look at the hourly chart of the S&P 500 futures contract. It retraced all of the recent advance and this morning it’s trading along the 3,750 level. The support level is at 3,650-3,700, among others.
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 is expected to open much lower again. However, we may see another intraday bounce. There’s still a lot of uncertainty ahead of the coming quarterly earnings releases.
Here’s the breakdown:
- The S&P 500 index fluctuated despite worse-than-expected inflation release; we may see another intraday bounce following a lower opening of the trading session.
- 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
