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 rallied following lower-than-expected Consumer Inflation number release. Today it is expected to open higher again, but will the uptrend continue?
The broad stock market’s gauge gained 2.13% on Wednesday after the monthly CPI release. It broke above the recent trading range and the 4,200 level. So it extended an almost two-month-long uptrend from medium-term low of 3,636.87 (June 17) despite the ongoing worries about inflation, tightening Fed’s monetary policy, Russia-Ukraine conflict. This morning the S&P 500 is expected to open 0.7% higher after the Producer Price Index release (-0.5% vs. the expected +0.2% m/m).
Futures Contract Trades at New Local High
Let’s take a look at the hourly chart of the S&P 500 futures contract. The market is extending its yesterday’s rally this morning after breaking above the 4,200 level. There have been no confirmed negative signals so far. However, there are short-term overbought conditions that may lead to an intraday downward correction.
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 0.7% higher this morning on another set of bullish economic data announcements. The market is getting overbought in the short-term, however, there have been no confirmed negative signals so far.
Here’s the breakdown:
- S&P 500 will likely extend its uptrend this morning; the market broke above its May consolidation range.
- 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
