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 back to their local lows, as interest rate hikes worries spooked the market again. But will the downtrend continue?
The S&P 500 index lost 1.48% on Thursday after bouncing from the 4,500 level at the opening of the trading session. The market retraced its Tuesday’s advance and it got back to the 4,400 level yesterday. There’s still a lot of uncertainty concerning the Ukraine conflict and Fed’s monetary policy tightening plans. This morning the S&P 500 index is expected to open 0.1% higher and we may see a short-term consolidation along the recent local lows.
Futures Contract – Below the 4,400 Level
Let’s take a look at the hourly chart of the S&P 500 futures contract. On Tuesday it broke above its short-term downward trend line and it retraced some of the recent declines. Yesterday the market reversed the short-term uptrend and it came back below the 4,400 level. However, stocks have managed to stay above their previous lows so far.
Recently, we closed a speculative long position with a gain of 100 points and we are waiting for another profit opportunity. (chart by courtesy of http://tradingview.com):
Conclusion
The S&P 500 index bounced from the 4,500 level again and this morning we will likely see a consolidation along the 4,400 level. Investors will wait for more quarterly earnings releases next week. The coming interest rate hikes are still a negative factor for the stock market.
Here’s the breakdown:
- The S&P 500 index will likely open slightly higher this morning; we will likely see a short-term consolidation along the 4,400 level.
- 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
