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 fluctuated wildly following yesterday’s Fed’s rate hike decision, but it closed higher. Today it’s expected to open much lower, so we’ll likely see more short-term volatility.

The broad stock market index gained 1.46% on Wednesday, after going down on FOMC’s Monetary Policy Statement release. It fluctuated within the recent trading range and a consolidation following three-day-long sell-off. On Tuesday the index was at the new medium-term low of 3,705.68 – 1112.9 points or 23.1% below its Jan. 4 record high of 4,818.62, and yesterday it bounced up to the 3,838 level, before closing below the 3,800 mark again.

There’s still a lot of uncertainty and worries about inflation data, tightening Fed’s monetary policy and the Russia-Ukraine conflict. We will likely see some more short-term volatility. This morning the S&P 500 index is expected to open 2.1% lower, but it may rebound again later in the day.

Futures Contract – New Low

Let’s take a look at the hourly chart of the S&P 500 futures contract. It was trading within a consolidation above the 4,080 level last week, and on Thursday it broke lower. The market reached new medium-term low this morning, as it got close to the 3,700 level.

We will wait for an upward reversal pattern before entering a speculative long position.

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 2.1% lower this morning following yesterday’s interest hike released from the FOMC. We will likely see more short-term fluctuations. It may be a short-term bottoming pattern.

Here’s the breakdown:

• The S&P 500 index will open lower this morning, but we may see an intraday rebound and more volatility.
• 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