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 prices went down on Friday and this morning they are expected to open higher. Will the market continue to fluctuate?
The S&P 500 index lost 1.6% on Friday, as it retraced its Thursday’s advance of 1.8% following monthly jobs data release, among other factors. The broad stock market extended its consolidation after the previous week’s rally. Thursday’s daily high was at 4,177.5. On May 20 it went to the medium-term low of 3,810.32 and it was 1,008.3 points or 20.9% below the Jan. 4 record high of 4,818.62. So technically, the broad stock market entered a bear market territory. There’s still a lot of uncertainty and worries about inflation data, tightening Fed’s monetary policy and the Russia-Ukraine conflict. Today, the S&P 500 is expected to open 1.1% higher, so we will likely see some more short-term fluctuations.
Futures Contract Remains Below the 4,200 Level
Let’s take a look at the hourly chart of the S&P 500 futures contract. It reached the 4,200 level on Monday a week ago, before retracing more than 100 points from the short-term local high. It’s trading within a short-term consolidation following the previous advance.
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 1.1% higher this morning. So it will extend a short-term consolidation. It still looks like a flat correction following the previous week’s rally. Investors will be waiting for June 15 FOMC’s interest rate decision.
Here’s the breakdown:
- The S&P 500 index will likely further extend its short-term consolidation today; the resistance level remains at 4,200.
- 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
