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.
Stock prices went closer to their recent local lows on Friday after a mixed monthly jobs data release. Will the market continue to fluctuate today?
The S&P 500 index lost 1.07% on Friday, as it extended a short-term consolidation following the recent declines. On Thursday the market was the lowest since mid-July on rising interest rate fears, strong U.S. dollar. The daily low was at 3,903.65. It further extended its decline following the previous Friday’s sell-off in a reaction to the Fed Chair Powell’s speech.
In the first half of August the S&P 500 was extending its two-month-long uptrend from the medium-term low of 3,636.87 (June 17) despite ongoing worries about inflation, tightening Fed’s monetary policy, Russia-Ukraine conflict. On August 16 it reached the local high of 4,325.28.
Today the S&P 500 index will likely open 0.4% higher after a long holiday weekend. It may see an attempt at retracing some of the Friday’s decline. But for now, it looks like another consolidation within a downtrend.
Futures Contract – Short-Term Consolidation
Let’s take a look at the hourly chart of the S&P 500 futures contract. It retraced its recent rebound on Friday and yesterday it just went sideways and along the 3,950 level. The resistance level is at around 4,000, 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 will likely open 0.4% higher this morning. Stock prices may extend their short-term fluctuations amid strong U.S. dollar, among other factors. For now, it looks like a flat correction within a downtrend. There have been no confirmed positive signals so far.
Here’s the breakdown:
- The S&P 500 index is expected to open slightly higher this morning; stocks may extend their short-term consolidation.
- 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
