Trading position (short-term, our opinion; S&P 500 futures contract): In my opinion, the short-term outlook is bullish and long positions are still justified from the risk/reward point of view (since Feb. 27).
Stock prices fluctuate following the recent rally – is it just a pause before another leg up?
The S&P 500 index gained 0.18% on Friday as it continued to trade along the 4,500 level amid mixed monthly jobs data. Recently stock prices were rallying on worse than expected economic data and reduced pressure for the further monetary policy tightening. On previous Friday the index bounced from the local low of around 4,356 despite hawkish speech from the Fed Chair Powell.
Stocks will likely open 0.1% lower today. So the S&P 500 may see more short-term uncertainty. On Friday the S&P 500 remained above the 4,500 level as we can see on the daily chart:
Futures Contract Trades Sideways
Let’s take a look at the hourly chart of the S&P 500 futures contract. This morning it’s trading along the 4,520 level. The resistance level is at around 4,540-4,550, marked by the recent local highs.
Conclusion
The S&P 500 index is expected to continue sideways this morning. Recently the investors’ sentiment improved as the pressure for further monetary policy tightening somewhat eased. But stocks may extend a consolidation along their mid-July’s local lows.
Here’s the breakdown:
- Stock prices may extend their short-term consolidation.
- The S&P 500 continues to trade above the 4,500 level.
- In my opinion, the short-term outlook is still bullish and long positions are still justified from the risk/reward point of view.
As always, we’ll keep you, our subscribers, well-informed.
Trading position (short-term, our opinion; S&P 500 futures contract): In my opinion, the short-term outlook is bullish and long positions are still justified from the risk/reward point of view (since Feb. 27).
Thank you.
Paul Rejczak,
Stock Trading Strategist
Sunshine Profits: Effective Investments through Diligence and Care
