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 went sideways on Friday despite better-than-expected monthly jobs data release. Was it a short-term topping pattern or just consolidation before another leg up?

The S&P 500 index lost 0.08% on Friday, as it fluctuated following its last week’s rally to the 3,900 level. The broad stock market retraced almost all of its previous decline despite rallying U.S. dollar and commodities’ volatility. This morning the S&P 500 index is expected to open 0.7% lower following global stock markets’ declines. There’s still a lot of uncertainty and worries about inflation data, tightening Fed’s monetary policy, Russia-Ukraine conflict and the coming quarterly earnings releases season.

Futures Contract – Short-Term Consolidation

Let’s take a look at the hourly chart of the S&P 500 futures contract. It continues to trade below the 3,900 level this morning. For now, it looks like a consolidation within a short-term uptrend.

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 likely to open 0.7% lower this morning. We may see a further consolidation following last week’s advance. Investors will be waiting for the coming quarterly earnings releases, Wednesday’s CPI and Friday’s Retail Sales releases.

Here’s the breakdown:

• Stocks are expected to open lower this morning and we may see a short-term profit-taking action following last week’s advance.
• 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