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 extended their uptrend once again yesterday, as the S&P 500 briefly breached the 4,300 level. Will we see a profit-taking action today?

The S&P 500 index gained 0.40% on Monday following its Friday’s gain of 1.7%. The index reached its new medium-term high of 4,301.79. It was the highest since early May. The S&P 500 extended 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. This morning the S&P 500 will likely open 0.2% lower following mixed housing market data releases.

Futures Contract – Consolidation Along New Highs

Let’s take a look at the hourly chart of the S&P 500 futures contract. It is trading slightly below the 4,300 resistance level this morning. For now, it looks like another flat correction within an uptrend. However, we can see some short-term overbought conditions that may lead to a more pronounced profit-taking.

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 slightly lower this morning. We’ll likely see a downward correction or a consolidation following the recent rally. However, there have been no confirmed negative signals so far.

Here’s the breakdown:

• The S&P 500 index reached the 4,300 level yesterday; it may see a short-term correction following the recent advances.
• 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