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 fluctuated following their Friday’s rebound yesterday. Will the short-term uptrend continue or is this still just a consolidation within a downtrend?
The S&P 500 index lost 0.39% on Monday, as it fluctuated following its Friday’s rally of 2.4%. The market went closer to the 4,050 level before closing just above the 4,000 level. On Thursday the broad stock market index fell to the new medium-term low of 3,858.87. It was 959.8 points or 19.9% below the Jan. 4 record high of 4,818.62. So, the market bounced from a psychological 20% correction mark. Recently stocks continued to decline following fears of inflation, tightening monetary policy and the Russia-Ukraine war.
This morning the S&P 500 index is expected to open 1.5% higher following global stock markets’ advance, weakening U.S. dollar.
Futures Contract Is at Previous Lows
Let’s take a look at the hourly chart of the S&P 500 futures contract. On Friday it broke above the short-term downward trend line. The support level remains at 3,980-4,000, and the resistance level is at 4,080-4,100.
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 1.5% higher this morning, so it will continue its short-term uptrend. For now, it looks like an upward correction. However, we may see some more sustained advance. The markets will be waiting for today’s speech from the Fed Chair Powell at 2:00 p.m.
Here’s the breakdown:
- The S&P 500 index fluctuated along the 4,000 level yesterday; it’s expected to extend an uptrend this morning.
- 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
