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 close to 4,000 mark yesterday. Will it break above that level or bounce down from it?

The broad stock market index gained 0.99% on Thursday, and it reached the daily high of 3,999.29. The S&P 500 went the highest since June 10 on economic data, corporate earnings releases. Stocks kept advancing despite the ongoing worries about inflation, tightening Fed’s monetary policy, and Russia-Ukraine conflict. This morning the S&P 500 is expected to open 0.1% lower. We will likely see a short-term consolidation or some profit-taking action.

Futures Contract is Close to 4,000

Let’s take a look at the hourly chart of the S&P 500 futures contract. It broke above the resistance level of 3,950 and this morning it is trading along the 4,000 level. The next resistance level is at 4,080, marked by the previous local lows.

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 slightly lower today and we may see some short-term fluctuations following the recent rally. There have been no confirmed negative signals so far. Investors will wait for the next week’s quarterly earnings releases.

Here’s the breakdown:

• The S&P 500 will likely fluctuate along the 4,000 level following its recent advances. For now, it looks like a consolidation within an uptrend.
• 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